Hoyts parent Dalian Wanda under pressure to consider sale

Hoyts operates at least 430 screens across Australia and New Zealand and rental machines in 650 locations.

Cinema chain Hoyts is under the spotlight as a potential candidate for a sale, with talk that its parent company, Dalian Wanda, is under pressure to drive down its debt levels. Buyers for the business are expected to be private equity firms, say sources.

Dalian Wanda, 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 Hoyts in 2007 for a price that valued the business at $440m.

There has been some talk in the market that the group has recently been exploring ways it may be able to offload the asset, although the business is not currently for sale.

 

Hoyts operates at least 430 screens across Australia and New Zealand and rental machines in 650 locations, along with the Val Morgan cinema screen advertising operation, which is the leading national supplier across Australasia with coverage of more than 2000 cinema screens.

Wanda Cinema is a minority shareholder in North American cinema chain AMC Entertainment, which this year underwent a $US917m ($1.16bn) financing to ward off bankruptcy, and is China’s largest private cinema operator with more than 150 multiplexes in 80 cities.

Cinemas have been among the hardest hit assets during the pandemic as countries introduced harsh lockdowns to curb the spread of the coronavirus.

Should Hoyts come up for sale, it would be the second Australian cinema business changing hands in recent years. At the end of last year, Village Roadshow agreed to a deal for BGH Capital to buy the business for $586m in equity.

 

Village consists of Australian theme parks such as Sea World and Movie World, as well as its cinema exhibition, film and DVD distribution, and marketing solutions arms.

Village Cinemas is one of Australia’s largest movie theatre operators with joint venture partner Event Hospitality and Entertainment, with nearly 600 screens across all Australian states.

A number of interested parties — such as outdoor advertising groups — are believed to have knocked on the doors of Hoyts in recent years to test its interest for a sale.