Terra Firma set to keep its stake in Odeon & UCI

Michael Bow
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TERRA Firma, the private equity firm controlled by seasoned investor Guy Hands, has decided to keep its stake in Odeon & UCI Cinema Group rather than sell out of the company.

The firm, which also owns property group Annington Homes, had appointed investment banks Goldman Sachs and JP Morgan in May to run the rules over the business to see if it was ripe for a stock market float or trade sale.

But after a volatile trading period, the company will hold onto its investment, possibly for the next 18 to 24 months, before looking again at selling the company.

The chain has failed to fire on all cylinders this year after a blistering summer caused movie-going numbers to fall. Problems in its Spanish markets, where results were weak in the second quarter after a 30 per cent fall in volumes, and a bumper crop of bigger blockbuster films set for release in 2015 are thought to have swayed the decision to hang onto the firm for the time being.

The company had originally explored a possible initial public offering to exit the business two years ago but instead settled on a £475m refinancing plan.

The Odeon and UCI Cinema Group were bought separately by Hands in 2004 for £566m and £310m respectively to add to the company’s portfolio of investments.

He subsequently merged the two together to create the joint entity.

A Terra Firma spokesman declined to comment.