Vue screens financial backers for blockbuster tilt at rival Cineworld

Published

3 years ago

February 13, 2023

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Europe’s biggest privately owned cinema operator has lined up financial backing from its new shareholders to help assemble a takeover tilt at Cineworld, its stricken rival.

Sky News has learnt that funds managed by Barings and Farallon Capital Management have agreed to provide capital to Vue International to support strategic acquisitions.

City sources said that Vue, with support from the two funds, would be among the bidders for Cineworld ahead of a deadline set by the latter’s advisers later this week.

Cineworld, which is listed in London and like Vue ranks among Britain’s biggest cinema chains, has filed for Chapter 11 bankruptcy protection in the US, and is now running a formal auction of its assets.

Last month, the company announced that it would “run a marketing process in pursuit of a value maximizing transaction for the Group’s assets, focused on proposals for the Group as a whole”.

“Cineworld has not initiated and does not intend to initiate a separate marketing process for the sale of any of its assets on an individual basis.”

Cineworld’s shares have slumped by 90% during the last year, and the entire group now has a market value of less than £60m, reflecting the fact that investors face being wiped out in any sale.

The identity of other prospective bidders for Cineworld was unclear on Monday.

Like the rest of the industry, Vue was badly hit by the pandemic and was forced to go through its own financial restructuring, which was completed just weeks ago.

After a £470m debt-for-equity swap, the company’s balance sheet is now in robust shape, with founder Tim Richards stating publicly that he wants to exploit opportunities to consolidate the sector.

A Vue spokesperson said on Monday: “Our focus at Vue remains on managing the strong recovery we are seeing in our business.

“While it would therefore be premature to speculate about any acquisitions at this stage, we continually evaluate a range of possible opportunities.”

Vue is thought likely to be keenest to own Cineworld assets in a selected number of countries, meaning it may have to line up buyers for those it does not want.

The cinema industry has been bolstered by the recent release of hits such as the Avatar sequel, while two of the top three biggest films in UK history have been released in the last couple of years – Daniel Craig’s final appearance as James Bond in No Time To Die, and Spider-Man: No Way Home.

Last year’s debt-for-equity swap saw Vue’s existing Canadian pension fund shareholders, the Alberta Investment Management Corporation (AIMCo) and Omers, relinquish their ownership status.

They had taken control of Vue in 2013 in a deal worth close to £1bn and subsequently presided over a string of acquisitions which helped turn the group into one of Europe’s largest cinema operators.

In 2019 – a record year for Vue – they began to explore a sale but did not conclude a deal before the COVID-19 crisis brought the leisure industry to its knees.

Its recent financial restructuring also gave the company, which employs more than 8,000 people, access to an additional £75m of liquidity.

Mr Richards, who also chairs the British Film Institute, has talked about the post-pandemic era becoming “the second golden age of cinema” as audiences flock back to entertainment destinations.

Vue trades from just about 230 sites, operating nearly 2,000 screens in nine European markets, including Germany, Italy, and Poland.

The company was forced to furlough thousands of UK-based employees during the pandemic, with its sites shut for months.

Mr Richards was also forced into a brief skirmish with Vue’s UK landlords as he sought rent reductions during the period of closures.

In the UK, Vue ranks behind only Cineworld and Odeon by number of sites.

Business

UK growth slows as economy feels effect of higher business costs

Published

6 hours ago

August 14, 2025

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UK growth slows as economy feels effect of higher business costs

UK economic growth slowed as US President Donald Trump’s tariffs hit and businesses grappled with higher costs, official figures show.

A measure of everything produced in the economy, gross domestic product (GDP), expanded just 0.3% in the three months to June, according to the Office for National Statistics (ONS).

It’s a slowdown from the first three months of the year when businesses rushed to prepare for Mr Trump’s taxes on imports, and GDP rose 0.7%.

Caution from customers and higher costs for employers led to the latest lower growth reading.

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Business

Claire’s to appoint administrators for UK and Ireland business – putting thousands of jobs at risk

Published

21 hours ago

August 13, 2025

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Fashion accessories chain Claire’s is set to appoint administrators for its UK and Ireland business – putting around 2,150 jobs at risk.

The move will raise fears over the future of 306 stores, with 278 of those in the UK and 28 in Ireland.

Sky News’ City editor Mark Kleinman reported last week that the US-based Claire’s group had been struggling to find a buyer for its British high street operations.

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Prospective bidders for Claire’s British arm, including the Lakeland owner Hilco Capital, backed away from making offers in recent weeks as the scale of the chain’s challenges became clear, a senior insolvency practitioner said.

Claire’s has now filed a formal notice to administrators from advisory firm Interpath.

Administrators are set to seek a potential rescue deal for the chain, which has seen sales tumble in the face of recent weak consumer demand.

Claire’s UK branches will remain open as usual and store staff will stay in their positions once administrators are appointed, the company said.

Will Wright, UK chief executive at Interpath, said: “Claire’s has long been a popular brand across the UK, known not only for its trend-led accessories but also as the go-to destination for ear piercing.

“Over the coming weeks, we will endeavour to continue to operate all stores as a going concern for as long as we can, while we assess options for the company.

“This includes exploring the possibility of a sale which would secure a future for this well-loved brand.”

The development comes after the Claire’s group filed for Chapter 11 bankruptcy in a court in Delaware last week.

It is the second time the group has declared bankruptcy, after first filing for the process in 2018.

Chris Cramer, chief executive of Claire’s, said: “This decision, while difficult, is part of our broader effort to protect the long-term value of Claire’s across all markets.

“In the UK, taking this step will allow us to continue to trade the business while we explore the best possible path forward. We are deeply grateful to our employees, partners and our customers during this challenging period.”

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Claire’s attraction has waned, with its high street stores failing to pull in the business they used to.

“While they may still be a beacon for younger girls, families aren’t heading out on so many shopping trips, with footfall in retail centres falling.

“The chain is now faced with stiff competition from TikTok and Insta shops, and by cheap accessories sold by fast fashion giants like Shein and Temu.”

Claire’s has been a fixture in British shopping centres and on high streets for decades, and is particularly popular among teenage shoppers.

Founded in 1961, it is reported to trade from 2,750 stores globally.

The company is owned by former creditors Elliott Management and Monarch Alternative Capital following a previous financial restructuring.

Business

Typical two-year mortgage deal at near three-year low – below 5% since mini-budget

Published

21 hours ago

August 13, 2025

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Typical two-year mortgage deal at near three-year low - below 5% since mini-budget

The average two-year mortgage rate has fallen below 5% for the first time since the Liz Truss mini-budget.

The interest rate charged on a typical two-year fixed mortgage deal is now 4.99%, according to financial information company Moneyfacts.

It means there are more expensive and also cheaper two-year mortgage products on the market, but the average has fallen to a near three-year low.

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Not since September 2022 has the average been at this level, before former prime minister Liz Truss announced her so-called mini-budget.

The programme of unfunded spending and tax cuts, done without the commentary of independent watchdog the Office for Budget Responsibility, led to a steep rise in the cost of government borrowing and necessitated an intervention by monetary regulator the Bank of England to prevent a collapse of pension funds.

It was also a key reason mortgage costs rose as high as they did – up to 6% for a typical two-year deal in the weeks after the mini-budget.

Why?

The mortgage borrowing rate dropped on Wednesday as the base interest rate – set by the Bank of England – was cut last week to 4%. The reduction made borrowing less expensive, as signs of a struggling economy were evident to the rate-setting central bankers and despite inflation forecast to rise further.

It’s that expectation of elevated price rises that has stopped mortgage rates from falling further. The Bank had raised interest rates and has kept them comparatively high as inflation is anticipated to rise faster due to poor harvests and increased employer costs, making goods more expensive.

The group behind the figures, Moneyfacts, said “While the cost of borrowing is still well above the rock-bottom rates of the years immediately preceding that fiscal event, this milestone shows lenders are competing more aggressively for business.”

In turn, mortgage providers are reluctant to offer cheaper products.

A further cut to the base interest rate is expected before the end of 2025, according to London Stock Exchange Group (LSEG) data. Traders currently bet the rate will be brought to 3.75% in December.

This expectation can influence what rates lenders offer.