Carlyle Group Makes Agreement to Buy Loews Theatres, including the Metreon

June 21, 2004
# 2004-36pc
Onex To Sell Loews Cineplex To Investor Group For C$2.0 Billion; Bain Capital, Carlyle And Spectrum Equity To Purchase Loews

Toronto -- Onex Corporation (TSX:OCX) announced today that it and Oaktree Capital Management, LLC, its partner in Loews Cineplex Entertainment Corporation and Grupo Cinemex ("Loews"), have reached an agreement to sell the business to a corporation formed by Bain Capital, The Carlyle Group and Spectrum Equity Investors for C$2.0 billion. Onex and Oaktree will retain the Loews interest in Cineplex Galaxy, which operates the Loews theatre business in Canada as well as Galaxy Entertainment and trades on the Toronto Stock Exchange under the symbol CGX.UN.

Loews is . The assets being acquired include Loews' operations in the U.S., Grupo Cinemex, and its 50% interests in Megabox Cineplex of Korea and Yelmo Cineplex of Spain. Onex' share of the cash proceeds is expected to be approximately C$775 million. In addition, Onex will continue to own units of Cineplex Galaxy, which have a current market value of approximately C$105 million.

"Loews Cineplex has been an excellent investment for Onex Corporation," said Anthony Munk, a Managing Director of Onex. "In partnership with management, we successfully restructured the company when we acquired it out of bankruptcy. Since acquiring it we have built it into a leading exhibitor. As part of the transformation of Loews, we completed three successful acquisitions in the U.S., Mexico and Korea. We also merged Loews' Canadian assets with Galaxy Entertainment as part of an income trust public offering, which significantly enhanced the value of the business."

"We are pleased to partner with Carlyle and Spectrum to acquire one of the largest movie theater chains in the world, with a high quality circuit focused in the top 10 U.S. markets and key international locations," said John Connaughton, a Managing Director at Bain Capital. "Thanks in part to an existing theater portfolio that has been recently upgraded, Loews is well-positioned to capitalize on the industry's steady growth prospects. The investor group will work closely with the talented management team to grow the business."

Credit Suisse First Boston LLC and Citigroup Global Markets acted as financial advisors to Loews Cineplex in connection with this transaction. It is currently expected that the sale, which is subject to customary regulatory approvals, will close during the third quarter.

Oaktree Capital Management, LLC, based in Los Angeles, is a private investment management firm with approximately US$29 billion of assets committed for management primarily from institutional investors.

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