British film studio Pinewood, home to the James Bond and Star Wars films. [Photo/bscine.com]

British film studio Pinewood, home to the James Bond and Star Wars films, wants to expand further into China, and has started a strategic review on Wednesday of its capital structure, which could include a sale valuing the company at over 250 million pounds.

Pinewood currently has a joint venture in China with Seven Stars and does consultancy work for two entertainment entities, the Dailan Wanda Group and the Shanghai Film Group.

"China is a very interesting market for film entertainment and we certainly want to continue to work with Chinese companies on the film entertainment market," Pinewood CEO Ivan Dunleavy told China Daily in an interview on Wednesday.

"The Chinese box office is widely predicted to become the largest film box office in the world," said Dunleavy, adding that it hopes to further its foothold in China by providing the company's production experiences, help partners create studios and work on co-productions.

He confirmed that his team is currently in discussion with a few Chinese parties on co-productions, and those co-production movies are likely to be movies attracting both UK and China interest, shot in both China and the UK.

Dunleavy said his team would be open to discussions with all interested potential buyers should the review recommend a sale, including Chinese buyers. The review is being conducted by investment bank Rothschild.

Dunleavy said currently Pinewood is not in discussion with any potential buyers.

Sahill Shan, an analyst at the stockbroker N+1 Singer, said there could be strategic and financial synergies from an acquisition. "Given the trophy asset nature of Pinewood we envisage high overseas interest from media or property companies, especially Chinese or US players," he said.

Shan said because Pinewood has a hybrid structure of both media and property businesses, potential acquisitions with companies like Wanda would make sense. Wanda is a Chinese property conglomerate that is rapidly growing in the media industry with its acquisition of the US cinema chain AMC in 2010.

Pinewood's in-house property business rents out office space to companies in film production support industries, such as costumes, sound, production, amongst others, so becoming an onsite one-stop shop for film productions.

Shan added that a potential merger between Pinewood and a Chinese firm can create a value proposition for filmmakers who want to shoot international blockbuster movies in both the UK and China, which would have more appeal to a global audience.

Pinewood said the main reason for conducting the review is to find a way to further expand its business, through additional capital injection. The company has wanted to move from being listed on the London Stock Exchange's junior market, the Alternative Investment Market, to the main board, but its current shareholding structure could not allow it.

The problem is that the company is effectively controlled by three shareholders: property group Peel Holdings, which owns 39 percent, jewellery chain Warren James at 26.1 percent and the insurance group Aviva at 13.1 percent. For Pinewood to move onto the main stock LSE market one of the criteria is that it must have liquidity, or a free float of shares, of 25 percent.

Dunleavy said that Pinewood's China activities are big drivers of the company's international revenue growth. He said the company's ambitions to co-produce movies with Chinese firms is "entirely consistent" with the UK China co-production treaty signed between the two governments in 2014.

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