Vue explores London IPO as cinema recovery lifts listing prospects

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Vue explores London IPO

Highlights

Vue is evaluating a London IPO or private sale with shareholders Barings and Farallon Capital eyeing a potential £1.5 billion valuation following a £1 billion debt restructuring.
Vue reported £781 million revenue (up 5.9%) and £80 million operating profit for the year to last November, benefiting from the cinema industry's post-pandemic recovery and a full film slate in 2024.
London IPO market remains slow, but Vue's potential listing and the anticipated £7.5 billion Airtel Africa IPO could boost momentum, supported by recent regulatory incentives.

Listing plans and exit options

As reported by Financial Times, Vue is considering either an initial public offering or a private sale as backers look to exit four years after taking control of the business in a £1 billion debt restructuring. Chief executive and founder Tim Richards says there is "too much gloom" around the UK market and adds that, if the company proceeds with an IPO, he would want to list on the London Stock Exchange.

Two people familiar with the matter say shareholders including U.S. asset manager Barings and hedge fund Farallon Capital favour an IPO at an estimated valuation of up to £1.5 billion. Vue's backers are working with advisers at Rothschild, and Richards says he has also spoken to chief executives who chose other exchanges and found that "the grass is not always greener."

Vue operates about 220 cinemas across eight European countries, including the UK, Germany and Italy. For the year to last November, the company reports revenue of £781 million, up 5.9% from the previous year, and an operating profit of £80 million.

Market backdrop and cinema sector rebound

Any Vue flotation would offer support for London's subdued IPO market, where several expected deals this year, including Visma, Loveholidays and AS Watson, have been delayed. Bankers are also looking to the planned £7.5 billion listing of Airtel Africa's mobile money business later this year, which would be London's biggest new listing since Wise floated in 2021 before moving its listing to New York's Nasdaq in May.

Richards says Vue's owners and management see this year as the right moment to review exit options because the cinema business is finally regaining pre-pandemic strength after what he describes as "six years of hell." The chain was taken over by lenders in a post-Covid rescue after lockdowns hit the sector hard, and the recovery was later slowed by 2023 Hollywood strikes by writers and actors that disrupted film production.

This year is the first full film slate since 2020, helping cinemas benefit from a stronger release schedule. One summer hit, Spider-Man: Brand New Day, this week surpasses Star Wars: The Force Awakens in the U.S. to become the highest-grossing film of all time there, while more than five films this year, including Christopher Nolan's The Odyssey, pass $1 billion globally.

Vue is also trying to push further upmarket, having introduced luxury seating with integrated wine coolers last year. Meanwhile, UK policymakers are attempting to attract more listings to London through regulatory changes such as a stamp duty holiday for new IPOs, lower free-float requirements and talks with private equity firms about bringing portfolio companies to the market.

In our earlier report, Vue weighed an investor exit via a London IPO or a private sale as cinema admissions and the summer box office improved after years of pandemic- and strike-related disruption. We noted that backers were said to favor an IPO valuing the business at up to £1.5bn, and that any flotation could provide a boost to London’s still-muted new listings market.

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