Isle of Man in Talks to Buy 19.9 Percent Stake in Pinewood Shepperton
LONDON - The government of the Isle of Man is looking at acquiring a stake of up to 19.9 percent in U.K. studio facilities operator Pinewood Shepperton, the two parties said Wednesday.
The possible purchase of a stake would be part of a proposed deal that would see Pinewood take on the role of manager of and adviser on film investment opportunities for the island's £25 million ($39 million) Media Development Fund (MDF) for a five-year period. The agreement is designed to help the island attract productions.
The news comes as Pinewood has faced some shareholder opposition to a proposed acquisition by a big shareholder.
The Isle of Man, which lies in the Irish Sea, is not part of the U.K., but the latter is responsible for its foreign relations and defense.
Pinewood, Europe’s largest film studio by stage space and home of the James Bond franchise, in a statement said that there is a proposal on the table from the island that its treasury "be authorized, but not required, to expend from the reserve fund an amount of up to £24 million ($37 million) to purchase up to 19.9 percent of the ordinary shares of Pinewood Shepperton plc from its shareholders, if satisfactory terms can be agreed in connection with this proposal."
A spokeswoman for the Isle of Man later said that the parliament of the territory, which is part of the British Isles, must give its approval for a deal to be finalized. Details on when that could happen weren't available, with the two sides saying further announcements would come "in due course."
The Isle of Man investment would value Pinewood at nearly £121 million ($187 million). The studio operator earlier this year received a £96 million ($148 million) takeover offer from real estate firm Peel Holdings, which owns about a 30 percent stake in the company. Pinewood has been looking to gain approval for the deal from shareholders representing three-quarters of its stock votes. But the company hasn't reached that level of support as some smaller shareholders have pushed for a higher price.
The studio operator didn't immediately provide an update on the status of the Peel offer. A Peel representative declined to comment.
If Pinewood finalizes an agreement and starts advising the MDF, "it is proposed that a core team from [government-backed financing and production group] CinemaNX will join the company to provide continuity," including chairman Steve Christian, the two sides said. CinemaMX has been managing the island's film development investments.
The Isle of Man has been active in film and TV production since 1995, investing £170 million ($ million) in 97 productions, which it says have generated "significant economic benefits." Its investments have been managed by CinemaNX since 2007.
Eddie Teare, treasury minister of the Isle of Man government, said: "The film and wider creative industries continue to play a key role in the island’s economic diversification and country branding drives. The island’s film investment program has delivered substantial upside to the local economy without resorting to a subsidy driven approach."
He added: “However, it’s clear that the international film industry is undergoing significant change particularly in financing and production...Developing an investment strategy with an established partner, which has an international reputation in film and television and in bringing production to the U.K., will help the island to build further upon the success that it has achieved in what is a growth sector for the world economy."
Among recent films made on the Isle of Man are Richard Linklater's Me and Orson Welles and The Disappearance of Alice Creed, directed by J Blakeson.
The island also said that 3D documentary TT3D: Closer to the Edge about a famous motorcycle race on the Isle of Man has attracted additional visitors and record-breaking ticket sales for this year’s event.
Under its current structure, the MDF provides equity financing to film production companies, discounts tax credits for productions qualifying for the U.K. tax credit and provides gap financing and other benefits to productions.