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New perspective for VUE

17 July 2017 by pdonnat

The cinema operator VUE was part of the iTraxx Crossover index over the last 3 years from the time it was bought by the Ontario Municipal Employees Retirement System, the Canadian pension fund. It was reported over the weekend that the pension fund is considering a sale or an IPO for VUE. The CDS tightened by 50bps today, closing at 192bps. Even if the company were bought by another private equity fund, the CDS would likely become an orphan as the issuer - VUE INTERNATIONAL BIDCO PLC - would be dissolved. However, the deal is far from being a done deal. Cinema attendance is quiet challenging. The all-time high in the UK was in 1946 with 1,635M admissions. Cinema admissions have been around 170M per year recently. Not all venues will be converted into gamers’ arenas like the one VUE converted in London. At least we know that the Ontario municipal pensioners have little appetite for gamers and that they see limited perspective on the VUE business model transformation.
Meanwhile, the credit market was gently enjoying a quiet session with little activity reported across the board.