The sale of Hoyts, one of Australia’s Big Three exhibitors, is said to be imminent. Partly owned by James (Son of Kerry) Packer’s Publishing and Broadcasting and West Australian Newspapers, which bought Hoyts for $347m just two years ago. The asking price is said to be north of $400, but this article from Herald Sun puts its finger adroitly on the problem with this or any other cinema business:
“There is not a lot you can do with it with your other businesses,” said Deutsche Bank media analyst Andrew Anagnostellis.
“The problem with that business is that you are really dependent on the product that comes out of Hollywood. So if there are big blockbusters coming through you do well, if not you don’t do well and the reality is it is not under your control.
“You’ve got essentially a fixed cost business with big variations in output.”
The potential buyers are said to include Reading Entertainment, Prime Television, Pacific Equity Partners and Catalyst Investment Managers, as well as Indian cinema operator Pyramid Saimira Theatre (see below). The deadline for bids are set to be this Friday, so don’t delay if you fancy you own cinema chain Down Under.