Cinven heading for cinema exit

The UK private equity house is preparing to sell the UK’s largest cinema chain to WestLB in a £450m secondary buyout.

UK private equity firm Cinven looks set to follow the E1.8bn of UK bingo chain Gala with the sale of its UK cinema group Odeon to WestLB.

 

The two firms are thought to be close to agreeing a £450m price for the business, which was acquired from The Rank Group in early 2000 for £280m. It was merged with fellow Cinven portfolio company ABC Cinemas, which were acquired when Cinven agreed to pay £70m to acquire Virgin’s city centre cinemas in 1996.

 

Odeon, Britain’s largest cinema operator, operates from 75 sites nationwide, including its flagship cinema at Leicester Square in London, and employs approximately 4,300 people. The ABC chain, which consists of 57 operating sites and employs 1,300 people, now operates under the Odeon brand.

 

At the time of the merger, Cinven committed itself to E96m further investment in the combined business, which now has 1,000 screens across 160 sites, making it easily the UK’s biggest chain ahead of UGC, UCI, both owned by debt laden Vivendi Universal and Warner Village, controlled by AOL Time Warner.

 

The private equity group, which has declined to comment, completed a refinancing of Odeon in December, securitising a £300m bond issue against cash flows generated from ticket sales.

 

WestLB, led by Robin Saunders, is also planning a £900m-plus offer for AWG, the holding company of UK utility Anglian Water. AWG has rejected the initial offer for the business, although WestLB has not ruled out the possibility of a hostile bid.

 

WestLB was not available for comment.