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
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
filmPoldark production team claims innocence of viewers' ab frenzy
Life and Style
Google marks the 81st anniversary of the Loch Ness Monster's most famous photograph
techIt's the 81st anniversary of THAT iconic photograph
News
Katie Hopkins makes a living out of courting controversy
people
Voices
All the major parties are under pressure from sceptical voters to spell out their tax and spending plans
voices
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Kevin Spacey and artistic director Matthew Warchus at the Old Vic party to honour Spacey
theatreStar's successor at Old Vic theatre admits he's 'allergic to hype'
Life and Style
life + healthVirginia Ironside's dilemma, during Depression Awareness Week
Arts and Entertainment
The median income for professional writers is just £10,432, less than the minimum wage
booksSurvey reveals authors' earnings
News
i100
Life and Style
fashion
  • Get to the point
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

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Sales Team Leader - Wakefield, West Yorkshire

£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...

Ashdown Group: Head of Client Services - City of London, Old Street

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders