Odeon In £1bn Deal Talks With Chinese Tycoon

The Odeon cinema chain is in talks to be sold to a company controlled by China's richest man in a £1bn deal that would ignite hopes that the UK's impending exit from the European Union has not dented its attractiveness to overseas investors.

Sky News has learnt that AMC Entertainment Holdings, which is majority-owned by Wang Jianlin's Dalian Wanda Group, is in detailed negotiations with Terra Firma Capital Partners, which owns Odeon & UCI Cinemas Group.

The talks are said to be at an advanced stage, with an announcement possible as soon as this week.

Sources said, however, that Odeon remained in an auction process and that a rival bidder could yet move to trump AMC's offer.

Vue, another large British cinema group, has also been interested in buying Odeon, although a combination of their businesses would raise competition issues.

If the deal with AMC goes ahead, sources said that Terra Firma, which is led by the prominent financier Guy Hands, is likely to take part of the sale proceeds in the US company's shares.

That move could help to insulate it from the impact of the recent weakening of sterling in the wake of the UK's vote to leave the EU, according to one source.

The Odeon and UCI chains, which between them operate roughly 250 multiplexes in seven countries, have effectively been on the market for the best part of a year following previous attempts by Mr Hands to offload them during his 12 years of ownership.

Wanda has previously denied reports that it was interested in acquiring Odeon and UCI, saying in a statement last September: "No individual from Wanda Group has ever been in contact with Odeon, nor has any individual or third party organisation been appointed on behalf of the Wanda Group to engage in contact with Odeon regarding any matters related to the acquisition of the cinema chain.

"Wanda has no intention of purchasing Odeon cinema chain," it said.

A number of competitors from the cinema industry in Belgium, Mexico and South Korea have also expressed an interest in buying the UK-based operator.

AMC is listed on the New York Stock Exchange and could be asked by US market regulators to issue a statement clarifying its involvement in the Odeon auction.

Wanda's appetite for international takeovers has seen it spending billions of pounds on assets including Carmike, another American cinema chain, the film studio Legendary Entertainment, and the Ironman Triathlon franchise.

A foreign takeover of Odeon and UCI would be interpreted as a sign of overseas investors' confidence in the UK economy given the cinema industry's exposure to consumer spending.

George Osborne, the Chancellor, is due to visit China later this month, while Lord Price, the Trade Minister, was in Shanghai last week to meet with his G20 counterparts.

A string of Chinese and US property investors have already sought to exploit the impact of currency depreciation by enquiring about big UK deals in the 17 days since the EU referendum, bankers and property agents say.

Goldman Sachs is advising Terra Firma on the Odeon sale while AMC is understood to be being advised by Citi, which recently saw a high-profile legal case with Mr Hands settled in its favour.

Odeon and Terra Firma declined to comment on Monday, while Wanda and AMC could not be reached for comment.