JDW and private equity firm eye 3D
R Capital and JD Wetherspoon are believed to be the front-runners to acquire the 3D Entertainment business.
M&C Report understands that the two companies are in pole position to buy the lion's share of the nightclub business between them in a sale handled by Zolfo Cooper.
R Capital, the private equity firm that owns Little Chef and Helena Leisure, is thought to be in discussions to buy a significant portion of 3DE's 60 bars and clubs, while JD Wetherspoon, the 750-strong pub retailer, is believed to be interested in up to 10 venues.
It is thought that a deal could be announced early in the New Year.
It is thought that several other parties remain potentially interested in buying some of the business, including Matterhorn Capital, Novus Leisure and Sun Capital.
It is thought that any deal is likely to be executed via some form of restructuring.
The business is 49% owned by Luminar, Britain's biggest nightclub business. It has a £10m loan note against 3DE, the value of which was recently written down from about £20m. The management team owns about 30% and Prestbury, the property firm, has about 20%.
Prestbury owns the freeholds of between 20 and 30 venues operated by 3DE. Sources indicate that it is willing to re-base the rents at these venues, trimming the annual rent by about £1m.
Sources close to the company intimated it was too early to say when a deal could be concluded.
In a recent announcement to shareholders, Luminar said that it was actively pursuing the sale of its investment in 3DE, but that the sale outcome was now expected to be significantly below the carrying value of £17.3m included in the group's balance sheet at 27 August 2009.
