European cinema operator Vue is weighing a listing on the London Stock Exchange, capitalising on momentum from a record-breaking summer box office, with a potential valuation reaching £1.5 billion. Such a move could inject fresh energy into the UK's long-struggling equities market.

Tim Richards, founder and chief executive of Vue, indicated that investors who took control of the chain through a £1 billion debt restructuring four years ago are now considering an exit via either a public offering or a private sale. Sources familiar with the matter say backers, including US asset managers Barings and Farallon Capital, favour an initial public offering (IPO) at a valuation of up to roughly £1.5 billion.

Richards noted that the UK stock market currently suffers from "too much pessimism." He said: "If we do an IPO, I personally believe in this country and would like to list on the London Stock Exchange." Emphasising that he is not rushing into the process, Richards explained he has spoken with chief executives of companies listed on other exchanges and found that "the grass isn't necessarily greener elsewhere."

A final decision is expected within weeks, with an aim to launch the process by the end of 2026 and potentially list next year. Vue's supporters have been working with advisers at Rothschild. As Europe's largest privately owned cinema chain, a successful listing would provide a significant boost to London's sluggish IPO market.

Several potential floatations have been postponed this year, including software firm Visma, Loveholidays, and the A.S. Watson Group. The banking sector is pinning hopes on Airtel Africa's mobile money unit, which plans a £7.5 billion listing later this year - that would mark London's largest new share sale since Wise debuted at a valuation of nearly £9 billion in 2021. Wise moved its primary listing to New York's Nasdaq in May this year.

Vue operates around 220 cinemas across eight European countries, including the UK, Germany, and Italy. In the fiscal year ending last November, the company generated revenue of £781 million, up 5.9% year-on-year, with operating profit of £80 million. The chain was taken over by lenders as part of a post-pandemic rescue deal, after repeated lockdowns severely impacted the cinema industry.

Richards stated that Vue's backers and leadership decided this year that it was "the right time to consider exit options," as the industry finally returns to pre-pandemic levels after "six difficult years." As part of a premiumisation strategy, Vue introduced luxury seating with integrated wine coolers last year.

This year marks the first full film release calendar since 2020. The US writers' and actors' strikes halted most Hollywood production in 2023, delaying the industry's recovery from the pandemic. This summer's blockbuster "Spider-Man: Fresh Start" this week surpassed "Star Wars: The Force Awakens" (2015) to become the highest-grossing film in US history, with nearly $2.5 billion in global ticket sales - one of more than five films this year to exceed $1 billion, including Christopher Nolan's "The Odyssey."

UK politicians and policymakers have been working to encourage companies to list in London, including implementing a series of regulatory reforms, offering stamp duty holidays for new IPOs, lowering free float requirements, and allowing founders to retain larger stakes. Earlier this year, the government also held talks with private equity firms to encourage them to list portfolio companies in London.