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3i exits UK film studios through #92m flotation

UK film studio Pinewood Shepperton has floated on the London Stock Exchange. The company was valued at £92m (€138m), earning 3i £20m (€30m) on its 60% stake. The studio raised approximately £46m (€69m) from the IPO, which is reported to have been at least 2.5 times oversubscribed at 180 pence per share.

Michael Grade, who will remain chairman, netted £250,000 after selling 18% of his 4.21% stake. He now has a share of 1.35%, worth around £2.5m.

A clause in his contract means his remaining interest cannot be sold until the studio publishes its full year results in March 2005.

Chief executive Ivan Dunleavy sold 15% of his 7% stake, making him £350,000. He retains a 2.34% interest. Intermediate Capital, the listed mezzanine provider, sold all of its 11.5%. Film director brothers Ridley and Tony Scott marginally increased their stake to around 5%.

Pinewood also revealed details of a £60m (€90m) 5-year revolving credit facility. The debt will be provided by the Royal Bank of Scotland (RBS), Lloyds TSB and Allied Irish Banks, with Alliance & Leicester Commercial Bank as senior lead arranger. RBS and Lloyds TSB are bookrunners, and Cazenove acted as financial adviser and Travers Smith Braithwaite as legal advisers to Pinewood.

The placing comprises offers by the Company of 27,777,778 ordinary shares in aggregate to raise net proceeds of approximately £46.2m and the sale of 13,943,915 ordinary shares, in aggregate, by certain selling shareholders. The new ordinary shares will represent 91.1% of the issued ordinary share capital of the Company immediately following the placing.

Based on the offer price of 180 pence per share and the number of shares in issue of 45,813,118, the market capitalisation of the company will be approximately £82.5m.

The company reported an operating profit of £11.4m (€17m) last year with revenues of £37.9m (€57m).

Michael Grade led a management buyout of Pinewood from Rank Group Plc in 2000 for £67m (€100m) pounds, backed by the 3i UK MBO Fund II. In 2001 the studio bought rival Shepperton for £35m (€52m) from Candover.