Virgin in race to get MGM cinemas

Virgin cinemas may soon join condoms, pension plans and cola in Richard Branson's empire if his £150m bid for MGM, Britain's biggest cinema chain, is accepted.

Advisers to French bank Crdit Lyonnais will decide on a short-list of bidders this week after receiving over 30 offers from around the world.

Mr Branson's dream of repeating his Virgin Megastores success will depend on beating off tough competition from the likes of Michael Green's Carlton Communications and Sony, Japan's electronics and entertainment giant. Mr Green has secured the backing of Goldman Sachs and Polygram, the US entertainment group.

A Virgin spokesman said: "It's extremely exciting. We can bring in our retail skills and our brand name, as we did with the Megastores. We have already launched a number of music and video stores in a joint venture with the Gaumont cinema chain in France."

The MGM name reverts to the US parent company when the cinemas are sold. Rank is also bidding, but may run into regulatory problems from the Monopolies and Mergers Commission because it already owns the UK's second-biggest chain, Odeon.

The Virgin project was suggested to Mr Branson several weeks ago by Luke Johnson and Hugh Osmond, well-known in the City for their entrepreneurial flotations such as PizzaExpress and the printer Bath Press. They have recently been linked to a consortium seeking to buy Wembley stadium.

Mr Johnson and Mr Osmond have banker Hill Samuel and stockbroker Panmure Gordon lined up to arrange a listing for the MGM chain if successful.

Credit Lyonnais has appointed SG Warburg to sell the MGM chain, which has 416 screens on 120 sites in the UK. It also has another 30 sites in the Netherlands and Denmark. Sources said yesterday that different bidders were going for different bits of the chain. The Virgin bid is for the UK cinemas only and does not include the UK head office. Many of the UK sites are freehold, making them ripe for development.

A SG Warburg spokesman said yesterday: "There has been an incredible response from companies all over the world. We have had indicative offers and we are now putting together a shortlist. The sale is well on schedule for the summer."

It is understood most bids have been around £150m mark, and the highest about £160m.

Film industry commentators have suggested that the recent highly colourful history of the MGM cinema chain would make a jolly good film. The original owners ABC sold it to Thorn EMI, who then sold it on to Australian tycoon Alan Bond in 1986. Mr Bond's business empire bit the dust after a sustained assault from Tiny Rowland. Ownership then passed to Cannon, an independent company run by two Israeli businessmen Menahem Golan and Yoram Globus.

The Israelis ran into financial difficulties of their own at the end of the 1980s, and sold the MGM chain to an Italian businessman Giancarlo Paretti. Crdit Lyonnais backed him to buy MGM's Hollywood studios for $1.3bn (£867m), and when he went bust last year the bank seized the cinema chain in lieu of its loans.

Crdit Lyonnais would like a quick sale, since it is now at the centre of one of France's worst banking crises. City commentators have dubbed the Lyonnais saga a disaster "five times the size of Barings".

Suggested Topics
News
Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
News
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
Sport
David Moyes and Louis van Gaal
football
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
PROMOTED VIDEO
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
Life and Style
life
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Worldwide ticket sales for The Lion King musical surpassed $6.2bn ($3.8bn) this summer
tvMusical is biggest grossing show or film in history
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
News
i100
Life and Style
food + drink
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits