Terra Firma considers £1bn Odeon sale

By THIS IS MONEY
Updated:

 

Odeon and UCI cinema group is being lined up for a potential £1bn sale by its private equity owner Terra Firma, according to reports today.

Popcorn cinema Odeon

Going pop? Terra bought Odeon for £574m in 2004

Terra Firma - which is run by financier Guy Hands - is understood to be close to appointing Bank of America Merrill Lynch to advise it on a sale or a refinancing deal after receiving approaches for the cinema business.

It is also believed to have held talks with rival private equity group BC Partners.

Terra bought Odeon for 650m euros (£574m) in 2004 and merged it with UCI, which it bought in the same year for 350m euros (£308.7m).

Profits from the UK's biggest cinema chain rose 20% last year driven by the popularity of 3D releases such as Avatar.

Terra Firma recently lost a high profile court case with Citigroup, which it accused of duping it into paying too much money for record label label EMI, whose acts include Lily Allen and Robbie Williams.

Citigroup seized control of EMI in February after it failed to repay interest on loans used to buy the record label.

It is understood Terra Firma has yet to make a firm decision on whether to sell the business or complete a refinancing.

Cinema chain Vue - which is also owned by private equity - is seen as a possible interested bidder for Odeon and UCI if the group is put up for sale, although it may face hurdles on getting the deal passed by competition regulators.

Vue, bought by Doughty Hanson last year, is said to be keen to acquire one of its two bigger UK rivals - the Odeon group or Cineworld. Its management have reportedly estimated cost savings from a potential takeover of Cineworld at between £15m and £25m.

Odeon has more than 100 cinemas in the UK, but the wider group has a total of 204 cinemas and 1,850 screens across Europe as a whole. Odeon was founded in 1930 by Oscar Deutsch, then bought by J Arthur Rank in 1941 and remained a part of The Rank Organisation for a further 58 years.

The group has since changed hands a number of times before Terra Firma snapped it up in 2004.

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