A plan by Vue International to merge with stricken rival Cineworld has reportedly stalled.
According to Sky News, Vue has been frozen out of a sale process being run by Cineworld’s advisers, leaving the privately-held company unable to pursue discussions about a deal. It was unclear whether the discussions would be revived.
Vue’s founder, Tim Richards, has been attempting to engineer a tie-up between two of the UK’s largest cinema operators, with Cineworld having filed for Chapter 11 bankruptcy protection in the US last summer.
Last week, Sky reported that the founder of boutique chain Picturehouse was in talks with Vue about buying it back as part of a break-up of Cineworld.
A sale of Picturehouse could have assisted Vue from a competition perspective given its status as one of Britain’s biggest cinema operators, Sky said.
Cineworld has been running a formal auction of its assets, although it said last month that any sale of its assets was unlikely to realise any value for its shareholders.
“The company has now received non-binding proposals from a number of potential transaction counterparties for some or all of the group’s business,” it said in a stock exchange announcement. “None of these proposals involves an all-cash bid for the entire business.”
Vue had lined up financial backing from its new shareholders to help assemble a takeover tilt at Cineworld.
Funds managed by Barings and Farallon Capital Management, as well as at least one other backer, are understood to have agreed to provide capital to Vue’s chief, Tim Richards, to support potential acquisitions.