Onex selling most of its Cineplex stake

Will retain a 2.5% stake after sale is completed

TORONTO -- Canadian equity player Onex Corp. said Monday that it will sell the bulk of its 26% stake in domestic exhibition giant Cineplex Galaxy Income Fund for CAN$184.6 million ($149.5 million).

Toronto-based Onex said that a syndicate of underwriters led by RBC Capital Markets, Scotia Capital and National Bank Financial will sell the units, which represent 23.5% of outstanding Cineplex Galaxy stock, at CAN$14.25 each ($11.50).

Onex, which first bought into 1,331-screen Cineplex Galaxy in 1998, will retain a 2.5% stake in the exhibitor after the sale is completed by April 21. The move follows a 10% stock price gain at Cineplex Galaxy this year.

Onex and U.S. partner Oaktree Capital Management LLC in 2004 sold the 2,200-screen Loews Cineplex Entertainment Corp. to a consortium of investment firms for CAN$2 billion ($1.5 billion).

Onex and Oaktree acquired Loews out of bankruptcy for $850 million in 2001.