Pacific Equity in talks to sell Australian cinema chain The Hoyts Group to China's ID Leisure for $743 mn

Australian private equity firm Pacific Equity Partners (PEP) is in talks to sell Australia's second-largest cinema chain The Hoyts Group to China's ID Leisure International Capital in a deal valued to be around A$900 million ($743 million), according to several media reports.

PEP, Australia's largest private-equity firm, had recently hired Swiss investment bank UBS to help run the sale.

PEP had acquired Hoyts in 2007 from Australian media tycoon Kerry Packer for $A440 million, and last year valued the cinema chain at A$900 million while preparing an initial public offering, but shelved the plan due to volatility in equity markets.

Hoyts is the region's second-largest cinema operator, with over 420 screens across 42 cinema complexes in Australia and 10 complexes in New Zealand. Most of these are multiplex cinema complexes located within large shopping centres in urban locations.

Hoyts also offers home movies via Hoyts Kiosk, Australia's largest network of more than 600 movie rental machines located at supermarkets and other locations throughout Australia.

Hoyts also operates Val Morgan, the largest provider of cinema advertising in Australia and New Zealand, with approximately 95-per cent market share. Val Morgan owns the exclusive rights to sell pre-feature film cinema advertising on the screens of all major Australian and New Zealand exhibitors.

Val Morgan also offers a series of other advertising media products including a network of over 2,300 digital advertising screens in high traffic malls and service stations.

ID Leisure is an investment vehicle owned by Chinese real estate billionaire Sun Xishuang, the 18th richest realty businessman with a fortune of $2.41 billion.

He founded Yifang Group in Dalian in 2001, which operates in four core areas: financial investment, city management, cultural tourism and realty. The company has total assets of over $4.88 billion and annual revenues of $1.95 billion.

He also holds a 6.3 per cent stake in China's Dalian Wanda Commercial Properties Co, which two years ago bought US-based AMC Theatres for $2.6 billion, and a 4.2 per cent stake in Wanda Cinema Line.