Redstone exhibits good sales timing

Much of National Amusements being sold off

Sumner Redstone seems to have picked a good time to sell movie theaters.

Most of the mogul’s Boston-based National Amusements chain, the original foundation of the Viacom empire, is being sold off in order to pay down the company’s outstanding debt. According to sources close to the sale, books went out to potential bidders last week — about 60 domestic parties and 20 in the U.K. — and have already generated strong interest. Bids are expected in the next three to four weeks.

The interest is not a surprise given that the exhib biz is up more than 10% across the board this year amid a recession-fueled upsurge in moviegoing. Many of the 54 U.S. and 21 U.K. theaters being offered by National Amusements could be attractive as a strategic fit for one of the larger circuits, such as Regal or Cinemark. National plans to hold onto about 17 locations in the northeastern U.S.

Private equity firms are also drawn to the theaters, and they’ve already shown an appetite for exhibition with the 2005 buyout of AMC and a separate deal in 2004 for Loews. The two chains later merged.

National Amusements holds Redstone’s controlling stakes in CBS and Viacom. Last fall, he was forced to sell $233 million in nonvoting shares of both when their share prices dropped so low that debt covenants were breached.

No shares have been sold since. In late February, National Amusements announced that Redstone had agreed to a plan with lenders for repayment of the company’s $1.6 billion in debt.

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