The backstory: management and ownership battles
The 80-year-old company, which provides stages and ancillary services for productions such as Star Wars: The Force Awakens and Spectre, has tasked financial advisor Rothschild with reviewing its capital base and structure. Management wants to secure a main market listing to support its growth ambitions and improve share liquidity, but Pinewood's stock is too tightly held for the company to qualify. Five investors own about 85 per cent of it: Goodweather Investment, an offshoot of Manchester-based conglomerate Peel Holdings; UK jeweller Warrren James; insurance giant Aviva; activist investor Crystal Amber; and brokerage N+1 Singer.
South Bucks-based Pinewood's ownership and management have been hotly contested. Peel took a majority stake in the group in 2011, but Warren James raised its holding to prevent it from taking the business private. Meanwhile, Crystal Amber recently lobbied for the removal of Pinewood's chief executive and chairman as it believes the company isn't run efficiently. And Aviva undercut Pinewood's main market ambitions by snapping up shares during the group's £30m share placing in April 2015, which was intended to finance expansion plans and diversify its investor base. One of the requirements for a premium listing is a free float of at least 25 per cent.
Pinewood's assets and prospects
Following its £37m buyout of joint-venture partner Shepperton in 2014, Pinewood has 37 stages and three digital television studios across its three main studios. Its board is keen to clarify its funding strategy as it gears up for the second and third phases of a £200m expansion programme. It's on track to complete the first phase - which will add five new sound stages and 300,000 square feet of additional facilities - in June.
Source: N+1 Singer estimates
Pinewood offers stage space and related services to film companies such as Disney and Universal. It also rents out space to around 260 independent media companies and offers financing to UK film, TV and video game producers, partly due to government tax breaks for the domestic film industry.
Robust demand for production services and high occupancy levels have boosted Pinewood's film revenues in recent months. The group has also grown its TV, media hub and media investment revenues and enjoyed good progress at its joint venture in Atlanta, Georgia, where parts of upcoming blockbuster Captain America: Civil War were filmed. The strong momentum led management to raise its growth expectations for the financial year to 31 March.
Who could buy it?
Potential bidders for Pinewood could include ITV (ITV), Sky (SKY) or Entertainment One (ETO) all three are investing heavily in exclusive content and original production and could put studio space to good use. Analysts have also highlighted potential interest from foreign media groups, as Pinewood's rich heritage could make it a trophy asset. Chinese companies have shown particular interest in overseas media investments; media and property giant Dalian Wanda recently shelled out $3.5bn for a controlling stake in Legendary Entertainment, the Hollywood studio behind summer hit Jurassic World.
Pinewood recently launched a joint venture with StoryFirst to create, develop and finance high quality TV dramas for international audiences. Pinewood Television will be helmed by Helen Gregory, who has produced shows for the BBC, ITV, Sky and Channel Four and helped make The Catch, an upcoming US crime thriller from Shondaland, the creator of hit series Grey's Anatomy, Scandal and How to Get Away with Murder.
Pinewood's bullish trading update led broker N+1 Singer to hike its forecasts. It now expects EPS of 15.5p in the year to March, rising to 17.4p next financial year (FY15: 13.5p).
