$271-Million Deal : Cannon Group Set to Acquire British Entertainment Firm

Cannon Group, the up-and-coming motion picture company that has made a succession of recent deals, said Friday that it has concluded an agreement to acquire Screen Entertainment of Britain for about $271.3 million at current exchange rates.

With the acquisition of the British company, formerly called Thorn/EMI Screen Entertainment, Los Angeles-based Cannon gains a 2,000-film library, 50% of a home videocassette partnership with Time Inc.’s Home Box Office and a 287-screen theater circuit in Britain.

The deal would make Cannon the largest motion picture exhibitor in Britain, since it already owns 198 screens, according to Barry Lublin, Cannon’s chief financial officer. “We believe that the Monopolies Commission will look at it,” Lublin said, but he added that the company believes that “eventually it will work out.”

Cannon has already made a “substantial” down payment and assumed operating control, so the companies regard the transaction as a “done deal” unless they encounter regulatory problems, Lublin said.

Most of the purchase price--about $232.5 million--will be paid in cash. The remainder will be paid in newly issued stock, subject to approval by shareholders, Lublin said.

As part of the transaction, Screen Entertainment’s owner, Bond Corp., retains the Australian rights to the subsidiary’s film library. Australian businessman Alan Bond, chairman of Bond Corp., will join the Cannon board.

The price of Cannon stock closed at $36.75 on Friday, up $2.75, on the New York Stock Exchange. A total of 203,200 shares changed hands.