It seems there’s a problem with Sumner Redstone’s plan to sell off a bunch of his National Amusements movie theatres to pay off his debt: No one wants to buy them.
Or, rather, Citigroup, which is selling the more than 1,000 theatres, has failed to get a decent bid for all of the cineplexes, The Hollywood Reporter says. Apparently buyers can’t just take some of the theatres and none of the major bidders wants all 1,000:
Regal Cinemas, Cinemark and others might be quick to bid on a select number of the theatres, which are spread nationwide with a key concentration of screens in the Northeast. But for now, the parties appear to be waiting for one another to blink regarding rules of engagement in the auction.
Sumner’s debt-relief plan seemed reasonable, under normal economic circumstances. But in this climate, apparently, it’s hard to get anyone to agree to buy a huge chain of movie theatres.
Though well-regarded in the exhibition community, National has chosen the worst of times to put its assets on the auction block. Wall Street sources suggest anybody bidding on the National screens likely would value the assets significantly below similar valuations of the recent past, when theatres have sold for a “multiple” of about seven times cash flow.
Sources tell The Hollywood Reporter that it’s only a matter of time before National Amusements agrees to sell its theatres piecemeal, which would likely help Sumner get rid of them. Since we don’t know if he has another plan for paying off his debt, this might be the best alternate route.
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