Made in Pinewood: Grade to rake in millions from flotation of blockbuster movie studios

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The Independent Culture

The television and film entrepreneur, Michael Grade, stands to make millions from the stock market flotation of movie studios Pinewood Shepperton, home to James Bond, Four Weddings and a Funeral and Harry Potter.

The television and film entrepreneur, Michael Grade, stands to make millions from the stock market flotation of movie studios Pinewood Shepperton, home to James Bond, Four Weddings and a Funeral and Harry Potter.

Mr Grade, 61, the chairman of the west London film studios, which merged in 2001, owns a 4.2 per cent stake in the company, which announced yesterday that it was planning to float on the main London Stock Exchange this summer.

The company hopes to raise funds for new projects including Europe's first underwater stage - ideal for future Bond films which always include a water sequence.

Mr Grade said it was too early to say how much the company hoped to raise but his stake is believed to be worth about £5m, with the value of the studios placed at around £140m.

Troy, the forthcoming Trojan war epic starring Brad Pitt, Lara Croft: Tomb Raider, and Bend It Like Beckham are just some of the latest blockbusters to emerge from the studios.

The third instalment in the Harry Potter sequence, a new Warner Brothers version of Roald Dahl's Charlie and the Chocolate Factory and Working Title's family comedy Nanny McPhee, starring Emma Thompson and Colin Firth, are in production at Pinewood.

Mr Grade, who led a £62m management buyout of Pinewood from the Rank Group in 2000, backed by venture capital firm 3i, said the company needs to float in order to grow.

"The demand for both film and television content continues to grow, offering us many opportunities to increase our business," said Mr Grade.

"We need to move forward and the capital structure we have doesn't allow for that."

He added that the flotation would allow prospective shareholders to invest in "high risk" movie content, without taking on the content risk.

Mr Grade, who is also chairman of the lottery operator Camelot, former chief executive of Channel 4 and candidate for BBC chairman, has overseen major changes at the company in the last four years.

Those include the introduction of television studios where programmes such as Anne Robinson's BBC quiz show The Weakest Link are filmed, and the merger with Shepperton, previously Pinewood's rival for more than 60 years.

"When we originally bought Pinewood with 3i, we had a plan and we set up a capital structure which suited 3i and suited us. We exacted that plan, which included introducing TV studios and buying Shepperton and merging the two studios. That stage is now completed, " Mr Grade said.

"The underwater stage will be a big attraction for filmmakers and unique in Europe," he added.

The company has no definite plans for new acquisitions, but is constantly monitoring the media service sector for new opportunities, including the possibility of operating a new film studio in the US.

The two studios cover more than 200 acres between them, have 36 stages, and have played host to more than 1,350 films.

In 1934, Charles Boot, a builder with aspirations to make movies bought the Heatherden Hall estate near Slough, Berkshire. The following year, he teamed up with J Arthur Rank, and the pair invested £1m in what became Pinewood.

The first film to be made in its entirety at Pinewood was Talk of the Devil, directed by Carole Reed in 1936.

David Lean's classic adaptation of Oliver Twist was made at the studio in 1947, and the later musical version of Charles Dickens's tale, Oliver!, was filmed at Shepperton.

Pinewood has been the backdrop for 18 Bond movies, from 007's first appearance in Dr No to the latest Die Another Day.

More than 650 films have been made at the studios in all, including th Carry On movies, Great Expectations, Fiddler on the Roof, Batman and Superman. In 2001, Pinewood merged with Shepperton, co-owned by Alien director Ridley Scott and his brother Tony, and situated a former country park in Staines. In the same year, television studios were introduced at Pinewood in a bid to increase revenues.

BBC sitcom My Family, the Only Fools And Horses Christmas specials, Dead Ringers, Thomas the Tank Engine and Jonathan Creek have all been made there.

Shepperton, founded in 1932, has been the cradle of more than 700 box office hits ranging from The African Queen, The Guns of Navarone and Gandhi to Notting Hill, Shakespeare in Love and Love Actually.

Some of the biggest names in film and television, are customers of the combined studios, including Disney, MGM, Paramount, Warner and British production company Working Title, owned by Universal.

In 2003, Pinewood Shepperton's revenue was £37.9m and it made an operating profit of £10.9m.

Chief executive Ivan Dunleavy, whose own stake in the company is 7 per cent, said Pinewood Shepperton's management, which currently owns a 17.5 per cent holding in the company, hopes to retain a "major" stake after the flotation.

The other three major shareholders - 3i with a 60 per cent stake, Intermediate Capital Group with an 11.5 per cent stake and the Scott brothers with 11 per cent - are all likely to sell some of their shares, and could dispose of them altogether.

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