Belgian and Mexican Cinema Companies Bid For Odeon
The two companies have nearly identical names: Kinepolis in Brussels and Cinepolis based in Mexico City. According to city sources, Kinepolis and Cinepolis have both made it through a second round of bidding for Britain’s largest cinema chain.
A sale process has been running quietly since early in the year, and Kinepolis and Cinepolis are not the only ones competing. Odeon’s rival Vue also has an interest in purchasing Odeon. Other people and groups interested in purchasing Odeon are Chinese cinema owner Dalian Wanda, and Korean chain CGV.
Terra Firma, Mr. Hands’ private equity firm, is rumored to be seeking a price of 1 billion pounds for Odeon. This is unsurprising given that Odeon’s finances have increased after audiences flocked to see the new Bond and Star Wars movies.
The high price tag may be deterring a few potential bidders, there is no shortage of international interest in Odeon. A number of cinema chains are seeking growth outside of their home territories, and Odeon might just be the ticket. Many companies hope that purchasing Odeon will allow them to gain clout for negotiations with film distributors.
Vue, owned by the Canadian funds OMERS and Alberta Investment Management Corporation, may be getting a leg up on the competition. Vue’s bid will most likely include larger cost savings from creating a UK-focused giant. One issue that would occur if Vue were to acquire Odeon would be the issue of monopoly watch dogs. Those trying to keep Vue out of obtaining a monopoly would force Vue to sell its cinemas in towns where Odeon and Vue directly compete with one another.
Dalian Wanda is a fairly strong bidder as well, even though the Chinese conglomerate directly denied interest in purchasing Odeon last year. The Chinese conglomerate also owns AMC.
Cinepolis is Mexico’s largest cinema operator. It recently began a mission to expand internationally. Cinepolis has opened luxury screens in California to attract high-spending audiences. The company opened its first cinema in 1947 and is owned by the Ramirez family.
It’s not surprising that a number of companies have their eye on Odeon. It is an extremely successful franchise with almost 250 multiplexes in seven countries. The UK remains comfortably Odeon’s biggest market, but Odeon also owns multiplexes in Germany, Italy and Spain.
Terra Firma first approached the idea of selling Odeon last year. Terra Firma then won backing from investors to delay, following the logic that they would be able to secure a higher price after last year’s strong sales. There is quite a competition surrounding Odeon, and it’s anyone’s guess who will acquire it.