With newly hot theater chains being gobbled up as fast as bags of popcorn on a big opening weekend, Gotham-based Loews Cineplex may have as many as 10 suitors in an auction that launched this week.
A handful of buyout firms and at least two rivals exhibs, AMC Entertainment and Cinemark, have put in initial bids for the chain or expressed strong interest, according to a report in Wednesday’s Wall Street Journal.
Financial players include Thomas H. Lee Partners, Bain Capital, Carlyle Group, Providence Equity Partners and JPMorgan Partners. Bids are in the $1.5 billion-$1.7 billion range.
Loews was acquired three years ago by investment groups Onex Corp. of Toronto and Los Angeles-based Oaktree Capital, which took the publicly traded company private due to nasty market conditions at the time. Theater chains back then were deep in debt from overbuilding, and were toppling into Chapter 11 in quick succession. They’ve since consolidated, shuttered underperfoming theaters and cleaned up their balance sheets.
Regal Entertainment, the nation’s largest chain, was taken over by Denver financier Philip Anschutz and snapped up a number of competitors, including United Artists. Cinemark was recently acquired by Madison Dearborn Partners for about $1.5 billion — including the assumption of about $560 million in debt. That auction was lively, with a number of bidders, presaging the high level of interest in Loews.
Loews and Kansas City, Mo.-based AMC, one of the few chains that has not filed for bankruptcy or changed ownership in recent years, had discussed a merger for months in 2003, but talks broke down over price. Loews and its bankers, Citigroup and Credit Suisse First Boston, may find a deal with AMC particularly appealing due to the synergies they could realize.