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Studios mull Brit merger

Pinewood, Shepperton could pool resources to maximize efficiency

LONDON — Pinewood and Shepperton, Britain’s two biggest film studios, could be heading for a merger.

Pinewood, led by chairman Michael Grade, is one of three companies in the running to buy Shepperton, which is owned by a consortium that includes Ridley and Tony Scott.

The other two bidders are understood to be U.S. companies, but their identity has not been disclosed.

Pinewood and Shepperton, situated within a few miles of each other on the fringes of west London, are two of the most important bases in Europe for major Hollywood productions.

Pinewood is currently playing host to Paramount’s “Tomb Raider,” while Shepperton is housing Universal’s “The Mummy Returns.”

Capacity maxed

A Pinewood source said a merger would not create any economies of scale, but would allow the studios to maximize their capacity by sharing projects.

“All our customers are merging, but the British film industry remains very fragmented,” said the source. “When you’re competing for projects against the Czech Republic, Australia, the U.S., Spain and the rest, you have to do everything you can.”

Typically, both studios are classed as full when only 80% of their stages are in use, because that does not leave enough space to house another film. But that spare capacity could be pooled if the studios were under common ownership.

But the source said reports of a deal are “very premature,” and that any agreement is “a long way from happening.”

Investment group

Grade heads a management team that paid $92.9 million in March to buy Pinewood from Rank. Deal was bankrolled primarily by investment group 3i, which owns 80% of the studio.

Shepperton, which also owns 40% of post-production house the Mill, is controlled by Candover, a private equity company that contributed $10.5 million toward the $18 million acquisition of the studio back in 1995. Candover has been looking to cash in its chips for several months.

Ridley and Tony Scott have been closely associated with the revitalization of Shepperton, although their own stake in the studio is thought to be minimal. Ridley Scott shot much of “Gladiator” there. Pinewood sources say they hope the brothers would continue their involvement if the merger takes place.

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