Pinewood Sheppperton has entered an agreement with the Isle of Man Treasury to source projects and advise on film investment opportunities for a £25M ($40M) fund established by the Irish Sea island. The initial deal term is five years. Along with taking a management fee, the studio facilities operator will recoup a portion of revenues generated by the sale of UK distribution rights to films in which the fund invests. In turn, the Treasury will buy just under 5M shares in Pinewood for £12.2M ($19.7M). The Treasury expects to offer equity finance, UK distribution and gap financing with no fixed caps.
The new deal gives Pinewood a larger footprint in film financing. In 2011, the company said it would invest up to a 20% stake in about four indie films per year. Its most recent project is Belle with Gugu Mbatha Raw, Matthew Goode, Tom Felton, Tom Wilkinson and Miranda Richardson which started shooting on Sept 24. Read More »
The publicly-quoted studio facility faces a renewed attack by shareholder Crystal Amber on Wednesday, when it announces its half-year results. Pinewood is expected to announce operating profits have fallen from last year’s £3.3 million ($5 million). Crystal Amber thinks that all the value of the company is locked up in its property portfolio. But Michael Grade, chairman of Pinewood Shepperton, insists Pinewood is a media company, not a property developer. Crystal Amber counters that the studio group hasn’t been paying its property assets enough attention. Stockbroker Investec has calculated that 82% of Pinewood’s value lies in its property assets, not studio operations. The group could make a lot of money selling off some of its portfolio.
Grade and his team are thinking about taking Pinewood Shepperton private again, says the Sunday Times. Crystal Amber has been quietly building up its shareholding to nearly 27% — just edging past second-biggest shareholder Peel Holdings. One idea might be to spin off Pinewood’s property management to a Peel executive, freeing up Grade and CEO Ivan Dunleavy to concentrate on running the studio. Hollywood movies shooting in Britain this summer include Disney’s Pirates Of the Caribbean: On Stranger Tides, X-Men: First Class – both at Pinewood – and Captain America, filming at Shepperton.
Pinewood shares floated at 180p back in 2004, but today are worth only 168p.
The former ITV chairman has survived a shareholder rebellion at this morning’s annual general meeting of the company that owns Pinewood and Shepperton film studios.
Crystal Amber, an activist investment fund with 18% of the shares in Pinewood Shepperton has attacked Grade’s “poor stewardship” as chairman of the company. The fund says the board needs fresh leadership.
Grade led the management buyout from Rank in 2000. Profits and return on capital have fallen by more than half since the business was floated in May 2004.
The fund first invested in Pinewood Shepperton 18 months ago because it felt the studio was undervalued. It then put forward its own proposals as to how market perception of the value of the business might be improved. Richard Bernstein, Crystal’s investment adviser, said that although initially well-received, nothing has happened and subsequent meetings with Grade have been “unproductive”.
Pinewood Shepperton says that most shareholders are behind it, which “gives us confidence that they support the board, its stewardship and strategy”.
The group has invited Steven Underwood of investor the Peel Group, which holds 26.6% of the company, to join the board.