Koreans Make £1bn Takeover Move For Odeon

One of Asia's biggest cinema operators has made a £1bn approach to buy the Odeon and UCI multiplex chains.

Sky News understands that South Korea's CGV is one of a number of suitors to have emerged for the two British cinema brands, both of which have been owned by the private equity firm Terra Firma for more than a decade.

Dalian Wanda, the Chinese conglomerate, and Vue Entertainment, Odeon & UCI Cinemas Group's major UK rival, are two of the other potential bidders.

Sources said that Terra Firma was working with bankers at Goldman Sachs (NYSE: GS - news) to evaluate the timing of a formal auction process, which analysts expect to take place this year.

Odeon' gross UK box office revenues grew by more than 20% last year to £321.5m, outperforming its major domestic competitors, with growth fuelled by the releases of Spectre, the latest James Bond film, and Star Wars: The Force Awakens.

Acquiring the UK-based cinema group would be a transformational move for CGV.

Odeon and UCI own nearly 250 multiplexes in seven countries, including Germany, Italy and Spain.

Last November, the company reported its fourth consecutive quarter of market share growth.

CGV operates a similar number of cinemas - with fewer screens than Odeon and UCI - and is concentrated in Asian markets, although it does have a presence in the US.

Terra Firma, which also owns companies such as Garden Centre Group, is exploring the raising of a new fund under the stewardship of Justin King, the former J Sainsbury chief executive, who joined the buyout group last year.

Such a move would mark a break with the recent past for Terra Firma, which has struggled to rebuild investors' confidence after it lost control of EMI, the music group, five years ago.

Although the performance of Terra Firma’s funds has otherwise largely been respectable, the EMI debacle – which remains the subject of a legal action against Citi brought by Mr Hands – cost it billions of pounds.

In recent years, it has nevertheless managed to return investors from the sale of other assets, including Germany’s largest private landlord.

Its existing investments are experiencing mixed performance, with Four Seasons Health Care, the care homes operator, facing a huge financial challenge from the Government’s new Living Wage.

Terra Firma and Odeon declined to comment, while CGV could not be reached.