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Cineworld Group PLC’s rival cinema chain Vue International has lined up financial backing from its new shareholders to help assemble a takeover tilt for the suffering Brentford, London-based cinema chain, according to a report from Sky News. Shares in Cineworld jumped 17% after the news to 4.98 pence each in London on Monday afternoon, although have slumped by 88% over the past 12 months. Sky News reporter Mark Kleinman said funds managed by Barings and Farallon Capital Management have agreed to provide capital to Vue International to support strategic acquisitions, with City sources claiming this support would allow Vue to be among the bidders for Cineworld. This is ahead of a deadline set by Cineworld’s advisers later this week, Sky News said, adding the identity of other prospective bidders was unclear on Monday. A Vue spokesperson said on Monday: ‘Our focus at Vue remains on managing the strong recovery we are seeing in our business. While it would therefore be premature to speculate about any acquisitions at this stage, we continually evaluate a range of possible opportunities.’ In early January, the beleaguered cinema chain put itself up for sale in hopes of securing its future. Cineworld operates over 700 sites across the globe, including over 100 in the UK and Ireland. It said at the time it would ‘run a marketing process in pursuit of a value maximizing transaction for the group’s assets, focused on proposals for the group as a whole’. Bloomberg reported in December that Cineworld denied breakup talks and that it intends to emerge from bankruptcy intact. Tim Richards, who founded Vue in 1999, also confirmed to The Times at the time that the company was ready to take advantage of any opportunities that presented themselves as speculation mounted that Cineworld could be broken up. Back in September 2022, Cineworld confirmed it was beginning Chapter 11 filing in the US Bankruptcy Court in Texas, as it grappled with liquidity woes. ‘Like the rest of the industry, Vue was badly hit by the pandemic and was forced to go through its own financial restructuring, which was completed just weeks ago,’ said Kleinman. ‘After a GBP 470 million debt-for-equity swap, the company’s balance sheet is now in robust shape, with founder Tim Richards stating publicly that he wants to exploit opportunities to consolidate the sector.’ Copyright 2023 Alliance News Ltd. All Rights Reserved.
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