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Vue sale in picture
(The Express On Sunday Via Thomson Dialog NewsEdge)CINEMA operator Vue Entertainment is on track for a projected GBP400million flotation or sale following the appointment of investment bankers.
The business, headed by chief executive Tim Richards, has drafted in investment bank Citigroup to explore exit options for its private equity owners - Legal & General Ventures, Boston Ventures and Clarity Partners.
Sources close to the company said a stock market flotation could happen within 12 months, although it has not ruled out a sale to another private equity firm.
Vue, the third-largest operator in the UK after Odeon and Cineworld with 51 cinemas, is thought to have performed well in a difficult year for the sector.
The British cinema industry suffered from a slump in trade in 2005 due to the lack of blockbuster movies. Overall attendances were flat compared with the year before. However, cinemagoers turned out in droves in December with the release of well-reviewed productions, such as The Chronicles Of Narnia and King Kong.
"It was a tremendous end to the year, " said an industry source.
The next few months are expected to bring a further fillip, partly through the release of the muchhyped Da Vinci Code and Pirates Of The Caribbean:
Dead Man's Chest. Vue was created in May 2003 when SBC International, founded by Boston Ventures five years earlier, acquired Warner Village for GBP250million.
Boston Ventures was joined by Clarity Partners and Legal & General Ventures as equal partners to complete the deal.
This was followed by the purchase last April of the UK and Irish operations of South African cinema operator Ster Century.
Sources close to Vue stressed no formal decision about whether to sell or float had been made, although the management was likely to decide during the next two months.
Industry experts said the business was unlikely to be sold to a rival operator following recent sector consolidation.
Private investors keen to grab a slice of the industry's generally stable cashflows have been snapping up cinema businesses in recent years.
Blackstone merged UGC and Cine-UK in 2004 to create Cineworld, the UK's second-largest cinema group with 77 cinemas.
Terra Firma, the investment vehicle owned by Guy Hands, bought Odeon and United Cinemas International in 2004 to create the UK's biggest group with more than 100 cinemas.
A flotation of Vue could herald a further shake-up of the industry as private equity owners look for ways to cash in their investments.
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