Blackstone’s Cineworld postpones IPO plans

UK cinema group Cineworld, a portfolio company of US private equity firm The Blackstone Group, has announced that its £450m planned flotation later this month has been postponed.

Blackstone portfolio company Cineworld, the UK’s second largest chain of cinemas, has decided to postpone its flotation on the London Stock Exchange (LSE).
Cineworld announced last month that it was planning an initial public offering on the LSE in June, with JPMorgan Cazenove and Lehman Brothers acting as joint global co-ordinators, bookrunners and joint sponsors for the flotation.
At the time, the IPO was reported to put an enterprise value of approximately £450 million (€652 million; $929 million) on Cineworld. US-based private equity firm Blackstone was expected to reduce its holding in Cineworld from 90 percent to below 50 percent following the flotation.
Steve Wiener, chief executive of Cineworld, however, announced that the IPO has been postponed due to current levels of volatility in the stockmarket.
“We have been very encouraged by institutional investors’ positive reaction to our company,” said Wiener in a statement. “However, Cineworld and its shareholders have decided to postpone the planned flotation as a result of adverse market conditions. In the meantime, the board and management will continue to focus on delivering its established growth strategy.”
Last October, Europe’s third largest satellite operator Eutelsat, backed by private equity firms Eurazeo, Texas Pacific Group, Spectrum Equity Investors, Cinven and Goldman Sachs Capital Partners cancelled its planned €1.8 billion flotation on Euronext Paris due to volatile market conditions.
However, Southern Cross Healthcare Group, another Blackstone portfolio company and the UK’s largest provider of care homes, announced last week that it intends to float on the LSE despite concerns about market volatility.
Blackstone acquired Cineworld in October 2004 for approximately £120 million from a private equity consortium including JP Morgan Partners, RIT Capital Partners and Botts & Co. Founded in 1995, Cineworld currently operates 79 cinemas comprising 820 screens and reported revenues of £272.2 million in 2005.