Hoyts suitor PEP lines up debt funding for $700m bid
We might be nearing closing credits for the Hoyts sale process.
Wanda is running a process to gauge buyer interest in its Hoyts cinema business.
Street Talk understands Hoyts’ suitor, Pacific Equity Partners, has asked a handful of lenders to submit indicative terms for a circa $500 million debt package to bankroll the acquisition.
Sources said term sheets were now with PEP, which was leading the talks with financiers and had chosen to forgo an investment bank. The only adviser was law firm Gilbert +Tobin.
Sources said PEP was considering a club deal at about 50 per cent of Hoyts’ $900 million enterprise valuation. It’s expected to be structured as a unitranche loan, sources said.
Should the private equity firm’s interest hold, it would return to owning Hoyts after a decade-long gap. PEP bought Hoyts off investors including West Australian Newspapers Holdings Ltd for $440 million in late 2007. It got its exit seven years later, selling to ID Leisure International Capital in 2014, which in turn sold to current owner Wanda Cinema Line just a year later.
Wanda Cinema Line brought in Credit Suisse and Nomura earlier in the year to stitch up its own exit. The bankers began marketing the process in April, telling potential investors Hoyts’ earnings were travelling at 75 per cent of pre-pandemic levels. Forecasts were for $638 million revenue and $130 million EBITDA for 2023.
Only two serious suitors emerged: PEP with a roughly $700 million bid and Anchorage Capital Partners with a lower bid, Street Talk reported.
Credit Suisse bankers – including James Disney, who was leading the sale process and set to start his own advisory shop – would have their fingers crossed their swansong has a happy ending.
Hoyts has 58 cinemas and
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