British cinema giant Cineworld is currently in confidential discussions about a potential sale as part of a strategic review of its business. The company, which faced financial struggles last year, is considering selling its UK operations and has enlisted the help of advisers to explore this option.
According to sources, Cineworld has reached out to potential buyers in the past few days and the sale process is expected to continue for several weeks. In addition to a potential sale, the company is also considering a company voluntary arrangement (CVA), which could lead to the closure of some of its UK cinemas. The company has not disclosed the number of cinemas or employees that could be affected by this.
Cineworld’s restructuring adviser, AlixPartners, has been brought in to manage the sale process. The company’s spokesperson, who was contacted by Sky News, declined to share details about the number of sites and employees in the UK. In a statement to Sky News, the spokesperson stated that Cineworld, like many businesses, is continuously reviewing its operations.
Cineworld, which is owned by the Greidinger family, has expanded globally in recent years through acquisitions, including the US chain Regal in 2018 and the British company of the same name in 2014. However, the company’s high debt levels led to financial difficulties and it filed for Chapter 11 bankruptcy protection in 2022. Last year, Cineworld delisted from the London Stock Exchange, and its share price plummeted. As part of its financial restructuring, the company exchanged billions of dollars in debt for shares and received an injection of new funds from hedge funds and other investors.
The sale process currently only involves Cineworld’s UK business and does not include its operations in central and Eastern Europe, Israel, and the US. It is unclear if the company’s subsidiary, Picturehouse, is also up for sale. Financial investors are expected to consider bids for Cineworld’s UK business, and rival company Vue is also likely to assess its potential for a takeover bid.
Last year, Sky News reported that Vue had secured funding for a potential acquisition of Cineworld but was excluded from the process, which was ultimately abandoned. Vue has also undergone financial restructurings but now has a stable balance sheet following the challenges of the pandemic and the Hollywood writers’ strike. In response to its financial struggles, Cineworld has appointed a new leadership team, with Eduardo Acuna, formerly of Cinepolis, leading as CEO and Eric Foss, a former Pepsi executive, as chairman.
However, any attempts by Cineworld to pursue a CVA or other restructuring that could harm its landlords are expected to face strong opposition. Some of the highly anticipated summer film releases in the UK include Despicable Me 4, A Quiet Place: Part One, and Alien: Romulus.