Vue's deal with private equity firm in final stage

Bosses at cinema chain Vue Entertainment spent the weekend thrashing out the final details of a sale to private equity worth around £450 million.

The UK's third largest cinema group is understood to be close to sealing a deal with buyout firm Doughty Hanson, with an announcement expected later today.

Management at the firm, led by co-founder and chief executive Tim Richards, are in line for a 70m windfall from profits of the sale. It is understood that Richards will receive nearly 25m.

Doughty Hanson is said to have beaten off competition from rival private equity firm BC Partners and Canadian pension fund Ontario Municipal Employees Retirement System (Omers).

Vue has 25 million attendances a year at 68 cinemas with 657 screens across the UK and Ireland. The group also owns cinemas in both Portugal and Taiwan.

Richards began hatching his plans for a UK-wide cinema chain in 1998, but it was not until 2003 that the company made its mark on the cinema sector when it secured sufficient investment for a 221m takeover of Warner Village Cinemas.

The deal catapulted the group into third place in the UK cinema market and it was after the takeover that the Vue brand was created.

In 2007, Richards and his team secured a management buy out valued at 350m and retained a controlling 51 per cent stake in the company.

Secondary buyout firm Collar Capital owns 29 per cent and hedge fund Och-Ziff owns the remaining 20 per cent.

Neither Vue management nor Doughty Hanson were available for comment.