Terra Firma to sell Odeon for £1bn

The owner of UCI and Odeon Cinemas, one of Europe’s biggest and best cinema chains, who regularly host premieres at their Leicester Square venue in London, may be cashing in for a huge cheque by putting the latter up for sale later this year. Odeon, along with Vue and Cineworld dominates the British cinema market, together accounting for roughly 70% of cinema screens throughout the UK. Cineworld is the only cinema operator listed on the London Stock Exchange.

Odeon currently have 273 cinemas in the UK, Ireland, Italy, Germany, Austria, and operate under the Cinesa brand in Spain – housing a massive 2,182 cinema screens. The first cinema opened in 1928 in Brierley Hill in the West Midlands, originally under the name ‘Picture House’, later operating as ‘Odeon’ in 1930. The company expanded vastly over the years through sales and acquisitions. Odeon underwent a series of sales in 2000 after The Rank Group decided to sell their company to reduce their debt, firstly selling to Cinven, who merged Odeon with ABC Cinemas, and in 2004 it was then purchased by Terra Firma Capital Partners for €650m, who also later bought out UCI (United Cinemas International) for €350m. A condition of the merger required a few of the cinemas to be sold to rival cinema company Empire Cinemas, which was agreed.

After years of owning the cinema chain, Terra Firma Capital Partners, owned by Guy Hands, attempted to sell Odeon and UCI off in 2011, but were unsuccessful in reaching bids for their £1.2bn valuation. They tried again in 2013, which also appeared fruitless. During this time they were working with JP Morgan and Goldman Sachs, who advised Terra Firma to wait for the business to improve before trying to sell again. They heard the advice and waited two years before making another go at it. They are planning to start the sale process by May, at a lower price of £1bn. Terra Firma, who are best known for buying out record company EMI in 2007, state that their possible market includes U.S. cinema groups, South American cinema operators and private equity firms.

Their possible buyers could include America’s Regan Entertainment and Cinemark, Brazil’s Grupo Severiano Ribeiro, who operated under the brand ‘Kinoplex’, and cinema rivals Vue Entertainment who are currently owned by OMERS Private Equity. There is also a chance for the deal to appeal to China’s property firm Dalian Wanda, who recently made purchases in sport and are looking to move into entertainment. Terra Firma also added that there is even a possibility of putting Odeon on the London Stock Exchange.