Luc Besson’s EuropaCorp has entered exclusive negotiations with France’s largest exhibitor, Cinémas Gaumont-Pathé, to sell off its multiplex business. The company announced the news Friday, a day after it unveiled that China’s Fundamental Films was set to become the company’s second-biggest shareholder (behind Besson) in a $67 million (€60M) deal.
The potential sale of the exhibition business represents another part of EuropaCorp’s strategy to refocus on its core business activities: production and distribution of TV and film. If successful, the deal would see Gaumont-Pathé take over EuropaCorp’s Aeroville 12-screen multiplex theater, which opened in 2013 in Tremblay-en-France near Paris’ Charles de Gaulle Airport, as well as the La Joliette multiplex project in Marseille, the latter of which is set to begin construction in January.
EuropaCorp’s exhibition strand has never been a huge part of the company’s overall business and, on average in 2014 and 2015, multiplex management repped about 4% of overall revenue. It operated, rather than owned, the Aeroville multiplex, renting it from commercial real estate company Unibail-Rodamco.
Initially, the move into exhibition came as part of a strategy to diversify the business and generate revenues with a limited risk, but the theater failed to turn over significant profit in the past three years and reports indicate that the Aeroville has so far amassed $11.1M (€10M) in net losses.
Trading in EuropaCorp fell about 4% this morning in France in light of the potential sale — that’s after it jumped about 20% on Thursday thanks to the Fundamental deal.
Gaumont-Pathé is the largest cinema chain in France, with sites also in Switzerland, Belgium and the Netherlands. It operates 110 cinemas across the continent with a total of 1,051 screens.