Sony bids for MGM cinemas

SONY, the Japanese electronics giant, has tabled a bid of £200m for MGM's UK chain of cinemas, according to sources close to the negotiations.

The bid is £50m higher than a rival offer from a consortium headed by Richard Branson's Virgin Group.

MGM is being sold by the French bank Crdit Lyonnais, which recently announced that it lost £1.5bn last year.

SG Warburg, which is handling the sale, has shortlisted a handful of potential bidders who will now be given six weeks to scrutinise MGM's accounts.

Sony's vast empire spans consumer electronics, music, films and television interests. Its main UK operation is a television plant in South Wales.

The indicative bid was arrived at before due diligence, and could be scaled back once Sony takes a more detailed look.

Sony is undergoing upheaval in Japan. Its president, Norio Ohga, announced last week that he would be stepping down at the end of the month. He will continue as chief executive officer while the new president, Nobuyuki Idei, who has been with the company for 35 years, becomes chief operating officer. It was under Mr Ohga that Sony moved into the record and film business in the late 1980s, with the acquisitions of CBS Records and Columbia Pictures.

The rival Virgin bid is in conjuction with the young City entrepreneurs, Hugh Osmond and Luke Johnson. Sony was not available for comment.