Virgin Acquisition Of MGM Cinemas

Richard Branson’s leisure group, Virgin, has acquired MGM, the UK’s largest cinema chain from Credit Lyonnais in a deal worth more than £190m.

Virgin said they plan to invest “tens of millions of pounds” over the next few years in upgrading the existing 116 cinemas. The new chain will be called Virgin Cinemas, and is expected to open 10 multi-screen units, according to Robert Deveraux, Chairman of Virgin Communications.

Credit Lyonnais,advised by S.G.Warburg, expected the sale to raise about £150m but the price was driven up to £190m due to fierce competition from, among other bidders, Carlton Communications. Mr Deveraux said Virgin had conducted a review of the existing circuit but will take another 3 months to finalise its strategy.