Odeon sale closer with Terra Firma talks

By THIS IS MONEY
Updated: 11:59 EDT, 12 April 2011

Odeon and UCI Cinemas Group owner Terra Firma has moved closer to selling the business after entering exclusive talks with two private equity firms.

Snapped up: Odeon was bought by Terra Firma in 2004 for £575m

The private equity firm run by British investor Guy Hands is drawing up a £1.2bn deal to sell the cinema group to BC Partners and Omers Private Equity, according to the Financial Times.

Odeon was bought by Terra Firma in 2004 for €650m (£575m) before Mr Hands merged the company with UCI, which was bought in the same year for €350m (£310m).

The group is now the largest cinema operator in Europe with more than 200 sites across the continent.

The sale could help repair some of the damage done to Mr Hands' reputation by the Citigroup seizure of music company EMI in February.

Terra Firma declined to comment.

Odeon & UCI generated underlying earnings of £80m in 2009.

Odeon & UCI, Cineworld and Vue are the three largest cinema groups in the UK by number of sites and together control 70% of the market.

Vue, which was sold last year to private equity firm Doughty Hanson for £450m, previously outlined plans to acquire one of its two UK rivals in the near future.

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.