Vue lines up backing for Cineworld takeover offer - report

(Sharecast News) - Vue has reportedly lined up financial backing from its new shareholders to help put together a takeover bid for beleaguered rival Cineworld.

According to Sky News, funds managed by Barings and Farallon Capital Management have agreed to provide capital to Vue International to support strategic acquisitions.

City sources told Sky that Vue, with support from the two funds, would be among the bidders for Cineworld ahead of a deadline set by the latter's advisers later this week.

London-listed Cineworld has filed for Chapter 11 bankruptcy protection in the US and is now running a formal auction of its assets. Last month, it said it would "run a marketing process in pursuit of a value maximizing transaction for the Group's assets, focused on proposals for the group as a whole".

"Cineworld has not initiated and does not intend to initiate a separate marketing process for the sale of any of its assets on an individual basis," it added.

Sky said the identity of other prospective bidders for Cineworld was unclear.

A Vue spokesperson told Sky: "Our focus at Vue remains on managing the strong recovery we are seeing in our business.

"While it would therefore be premature to speculate about any acquisitions at this stage, we continually evaluate a range of possible opportunities."

At 1200 GMT, Cineworld shares were up 21% at 5.15p.