HIGH NOON LOOMS FOR PINEWOOD

11-01-2010

Stirrer blogger Jonathan Stuart-Brown - the man determined to bring a chunk of the UK movie industry to the West Midlands, presents his latest update on the goings on at Pinewood PLC, owners of Britain's main film production centre. He reckons there might be a takeover, and more foreign outsourcing - but hopes John Hurt will ride to the rescue.

Well this week may see the long expected OK Corral shoot out over Pinewood Shepperton PLC owners at very least we are getting closer. My own guess is takeover bid move in mid February to March. I would guess that the price on offer might even be £4 a share compared to the usual £1.30 a share during 2009.

That is if the property NOT the film model is the driver.

Someone bought over 1% (around £ 700 000) of shares at 12.41pm last Thursday (at a price valuing the business at £60.75 million) and there will be an official public announcement later today (Monday) about who this is.

The original speculation was that it was property developer John Whittaker of Peel Holdings on 27% already which makes over 28% and near the 30% point when he must by law launch an immediate formal takeover bid.

The Daily Mail has alluded to his interest being in property values NOT movies.

But The FT has fingered Crystal Amber and if correct they would now have over 15% of shares. We shall soon now.

The FT suggest that Crystal Amber like John Whittaker is after the property value in Pinewood Studios (near 300 acre London sites if we include the 110 acre greenbelt).

We think they mean car parks, houses, other commercial use than making Robbie Downey Jnr in Sherlock Holmes 2 and Daniel Craig's 007 James Bond 23 on the British sites. These movies may end up in China and certainly (once built) in Pinewood Malaysia, or (already built) Pinewood Toronto in Canada where they have transferred Daniel Craig's new movie Dream House while (according to Pinewood and Shepperton veteran film set designer) the British sets currently have no films and British based workers no jobs at all for at least a few months.

The central tension in this scenario is that film manufacture is most economically viable on cheap land, not some of the most expensive in the world. When built By Charles Boot in the 1930s Pinewood was on very cheap land, but now as West London has expanded and grown ever more coveted by the world, it is just far too juicy for property developers to ignore.

Pinewood Studios do need a cheaper base for expansion of film production, and China and Malaysia qualify. But so does The West Midlands if the political will is there among MPs.

The political sticks to use on Pinewood are: monopoly legislation; The Communications Act 2003 (which gives them 30% of their income from TV production classified in the "regional" non-London mandatory quota, and could be challenged) and the staggering and regular public purse monies they receive and seek. You could argue that they have already been nationalised de facto by the public purse monies being put in again and again just not formally nationalised de jure.

There is also the fact they until 2002 deserved their then 65 year reputation for passionate film making and passionate British patriotism. Their owners put their own money into movies for generations and recent owners up to 2002 financed the likes of Alien, Blade Runner, and lots of other big movies made at the Studios.

The post 2002 change in personnel in management and share ownership needs massive political scrutiny especially as the trend is to property not films.

Of course Crystal Amber and John Whittaker may with their 42% be about to work together. Eight percent more and they can sack the Board and management, or just in football terms dictate the new team selection, tactics and transfer policy.

No-one knows John Whittaker's plans. He may be a born again film maker as were businessmen Arnon Milchan (chemicals and fertiliser to Pretty Woman), Ed Pressman (toy manufacture to Conan, Wall Street, Platoon), Harvey Weinstein (Lord of The Rings and Pulp Fiction) and Cubby Broccoli (casket making to James Bond 007).

He also has Media City in the North-West, the new BBC North development. Some say he wants "in" to Birmingham big time, but the present status quo of developers and powers that be feel very threatened and work hard to keep this real deliverer of excellence, regeneration and jobs out of our region.

John Whittaker may be of course be primarily interested in extracting property value from the British sites (having regenerated Liverpool docks, built Trafford Centre, and with a £1.2 billion development deal for Glasgow docks and £4.5 billion development deal for Birkenhead). He does a nice line in hotels, nightspots, houses, offices, distribution and transport centres...and Liverpool and Manchester airports with several others in his sight.

We do wish he came from Birmingham or was on the red carpet invitation list.

But like my pressure group Save The British Film Industry, he seems mostly unwelcome here by the powers that be. Meeting him is far more important than meeting us.

Crystal Amber, on the other hand, openly claim to be money managers seeking serious profit for investors (and not sentimental film makers). Moreover, so far they certainly deliver profit and share appreciation if not many films.

Now between the different camps on The Board and Pinewood management, and the two principal shareholders who can remove them (if they get a combined 50.01% of shares), there are sharp differences over the greenbelt expansion appeal, the foreign expansion plans, the film factory business model versus other commercial use such as houses/car parks/supermarkets.

There are over 200 companies and Guilds headquartered in Pinewood (many longer than present Board and management and shareholders). There is a daily debate going on which was in turbo charge when those inside Pinewood challenging the wisdom of the greenbelt expansion were proved 100% correct and also receiving big media coverage.

They wanted a clear offer of property and money from elsewhere in The UK to help them win the internal argument. So far they are still waiting.

Some are really trying and everyone knows The Stirrer website launched the whole campaign which has reached Hollywood and India.

Gisela Stuart MP has been outstanding in trying to get The Board and two senior shareholders to the negotiating table to explore a Birmingham expansion for any existing film factory and now put the matter of Pinewood Shepperton PLCs monopoly into The Business Secretary Lord Mandelson's court with a view to referral to The Competition Commission.

It would help if Creative Industries Minister Sion Simon MP got a team in his Department monitoring this and asking the right questions, or if Tom Watson MP our West Midland man on The Media Select Committee in Parliament starting to see if this is what their Committee was set up to do. It has the power and status of a court and can demand to read documents and subpoena people on oath.
It is merely the British Film Industry and 75 year heritage at stake.

As The FT confirms, Pinewood Shepperton PLC has always significantly underperformed The FTSE 100 over the last five years (in that it has not proved a profitable investment for the money managers despite the huge number of jobs it has created for p.a.y.e. and moreover freelance film workers).
Well this was true until injury time on Friday.

Very late on Friday, (within 3 minutes to the final whistle) someone bought a healthy sum of shares at way above the going rate. Indeed it distorted the final score so that it looked like Pinewood Shepperton PLC share price and company value had gone up by over 9%. It valued the company at £68 million. Maybe they were guessing, may be they know something...but they wanted the shares urgently at almost any price when a few hours earlier they could have got them 10% cheaper.

Maybe it is showtime next week but even if not quite yet, there is a real once in a lifetime opportunity for Sion Simon and Tom Watson to pro-actively support the outstanding efforts by Gisela Stuart MP.
I am always happy (at my expense and time) to meet and brief any West Midland MP or interested party such as AWM and others if permitted. I am always available on the phone.

Pinewood Studios has many camps vying for ascendancy in its future strategy. One is still convinced that they will get the green belt land on appeal, while another thinks it is madness which will bankrupt them. My point has always been that amid the uncertainty, confusion, takeover fever, that a crystal clear offer of West Midland land and money to expand in some form to our region would permit those fighting to keep film making in Britain and to keep Pinewood in film making (rather than the housing/car park business) would help them win the internal debate.

So far no crystal clear offer has been made, and no public meeting round table of all the relevant West Midland parties (MPs, council representatives, AWM, Unis, West Midland Minister Ian Austin, Creative Industries Minister Sion Simon,) has materialised to thrash out an offer despite the media excitement about a bid in late October.

We could even do a joint split site bid with Wales where they have now finally got a £300 million studio facility up and running near Bridgend. It has two Hollywood pictures coming out (Clash Of The Titans and a historical action movie about bad King John called Ironclad). Both are much bigger than The West Midlands has ever seen plus it now has the factory facilities to bid for bigger Hollywood blockbusters.

Twice Oscar nominated John Hurt has been campaigning for the Westminster Parliament and Welsh Assembly to see this as the economic salvation of the nation. He has emphasised the creative genius outside London not being empowered. He has put himself about especially in Wales.

Who knows ? This BAFTA winning star of 100 films might IF ASKED even speak up for The Midlands. He was born in Derby and supports Derby County FC including going to matches.

Maybe the Ministers, MPs, Council leaders, Paul Thandi of The NEC Group, Paul Kehoe of BIA, Lord Digby Jones, Neil Rami of Marketing Birmingham, the Unis, Colleges and theatres may now be contacting him as well as John Whittaker and Crystal Amber.

Even if some in power think such approaches must always be stealthy, hush-hush and not brazen and publicly, then surely there can be invites to NEC events, dinners, ballet, golf, functions, the Glee Club, WBA v Derby, Birmingham v Man Utd, Villa v Liverpool games where over drinks and canapies people can talk unobserved!

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