Anchorage Capital Partners exits contest for Hoyts

Hoyts could end up back in the hands of former owner Pacific Equity Partners. Picture: Tony Gough

Anchorage Capital Partners is understood to have staged an exit from the contest to buy cinema chain Hoyts, leaving Pacific Equity Partners as the only contender.

Sources say that PEP had been hard at work on a possible acquisition of Hoyts in recent weeks.

But more recently, there had been little activity around the opportunity, although it was not out of the race.

One explanation of that could be PEP has put forward a bid and is waiting to hear if the Chinese owner of Hoyts – Wanda Group – is prepared to sell at its offer price.

The understanding is that both PEP and Anchorage made proposals below Wanda’s asking price, with PEP’s bid the better of the two.

Yet the unknown factor remains how badly Wanda is keen to part with the business.

Hoyts has 430 screens and in the past year, it generated about $150m of annual earnings before interest, tax, depreciation and amortisation on the back of the Covid-19 recovery.

The earlier suggestion was Wanda wanted more than $900m for the business, whereas suitors would probably pay around $700m.

The sale process was run by Credit Suisse and Nomura.

Sources say between three and 10 parties lobbed offers with a mixture of both local and offshore buyers, as well as trade players and private equity.

Credit Suisse has shopped Hoyts before, and DataRoom first flagged in February 2021 that a sale was on the cards and later first revealed owner Pacific Equity Partners was looking at the business.

Dalian Wanda Group, controlled by billionaire Wang Jianlin, purchased Hoyts from Pacific Equity Partners in 2015 for what was thought to be a deal worth $US750m.

PEP had bought the cinema chain in 2007 for a price that valued the business at $440m.

Hoyts also runs the Val Morgan cinema screen advertising operation, which is the leading national supplier across Australasia.