Britain's biggest cinema chain, MGM, is to be put up for sale by its French bank owners early in the New Year for Fr1bn-Fr1.2bn (pounds 125m-pounds 150m).
Credit Lyonnais, the troubled French bank that took over the cinemas when its loans to the MGM studio group went sour, also confirmed that it had hired Warburg as its merchant bank adviser on the deal, in cooperation with Clinvest, Credit Lyonnais' own investment bank.
The MGM Cinemas group has 526 screens in Britain, the Netherlands and Denmark on 150 sites. But the bulk of the business is in the UK, where there are 416 screens on 120 sites.
Credit Lyonnais was optimistic yesterday about a rapid sale, saying it had already had more than 30 expressions of interest from all over the world.
In Paris, there were suggestions that Steven Spielberg, Jeffrey Katzenburg and David Geffen, who recently joined forces in a new production studio, could be interested. The French group Chargeurs was also mentioned as a possible buyer.
But in the UK, where the Monopolies and Mergers Commission recently published a critical report on cinema distribution, obvious contenders such as the Rank group - which owns the second largest Odeon chain - could be ruled out on competition grounds.
To avoid another monopolies probe, any offer from within the UK industry might have to come from one of the smaller groupings, which include National Entertainments, United Cinemas International and Warner Bros.
The commission said MGM Cinemas had 25 per cent of the industry's pounds 290m box office receipts last year. It said MGN was part of a complex monopoly among the 15 distributors and exhibitors in the UK. As a result of the report the Government is negotiating with the industry to drop some practices, such as fixing minimum exhibition periods for films. …