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LONDON-US venture fund Blackstone Group has paid euro 290 million ($389.5 million) for the UK and Irish assets of French cinema group UGC. The deal creates the country’s second-largest cinema chain. UGC operates 408 screens in 42 cinemas. Earlier this year New York City-based Blackstone acquired Cine-UK, which has 37 cinemas with just under 400 screens, for euro 173.8 million ($233.6 million).

The UK cinema industry has been transformed this year after Terra Firma, the investment vehicle of financier Guy Hands, snapped up the Odeon and United Cinema International Chains. The deals were worth a combined euro 848.7 million ($1.1 billion), and his group is now the biggest force in the sector. The only large UK operator not to change hands this year is Vue Entertainment, which has slipped to third position in terms of size. Vue, which runs 40 cinemas with 384 screens, was formed in May last year by the acquisition of Warner Village Cinemas by SBC.

Property experts believe the Blackstone and Terra Firma deals will increase the strength of each operator’s covenant, which could lead to even greater investor interest. Cinemas are seen as attractive because they have property asset-backing, stable cash flows and a diverse customer base.

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