Cinema giants eye Berlusconi chain The Space Cinema

Britain's three biggest cinema chains are considering bids for a group of picture houses owned by disgraced former Italian prime minister Silvio Berlusconi and fashion house Benetton.

The Guy Hands-owned Odeon, London-listed Cineworld and acquisitive Vue are keen to expand their European operations and are considering whether to stump up the estimated €300m (£242m) asking price for The Space Cinema chain. The cash would help Mr Berlusconi's Mediaset television empire, which has been struggling with low advertising revenues and owns 51 per cent of The Space. However, Odeon might struggle with competition issues because it is the biggest cinema operator in Italy and The Space is second with 350 screens and 20 per cent market share.

Also, the price fetched at the auction run by Citi might be depressed by the country's consumer spending woes, which saw October ticket sales down 41 per cent on the same month last year. The cinema market is banking on bumper audiences for the first film in The Hobbit trilogy in the build-up to Christmas.

A source at one of the potential British buyers said: "It would be crazy for any of us not to look at this."