Sony Said to Make Top Bid for MGM’s U.K. Theaters : Entertainment: Analysts say the reported $318.7-million offer would close a distribution gap for the Japanese studio owner.

Sony Corp. has reportedly offered $318.7 million for MGM’s chain of theaters in Britain, outbidding rival entertainment giant Virgin Group for the United Kingdom’s biggest group of movie houses.

Sony officials in Tokyo declined to confirm the bid, reported by London’s Independent on Sunday newspaper. “We cannot comment on that at this time,” a spokeswoman said today.

The French government-owned bank Credit Lyonnais is selling off chunks of troubled MGM since sustaining roughly $10 billion in losses on its star-crossed venture into Hollywood.

The MGM chain includes the profitable Leicester Square cinema in London, which enjoys high attendance for first-run films. By one count, MGM owns nearly a quarter of Britain’s movie screens. Movie attendance in London increased last year for the first time in a decade.

Sony, for its part, would like to establish wider distribution for its movies, fully integrating its entertainment unit, which includes the Columbia and TriStar studios.

“The strategy makes sense,” says James Grey, communications and electronics analyst at Jardine Fleming Securities in Tokyo. “Distribution is the one plank of Sony’s business that’s missing.”

The proposed purchase would be a significant hit to Sony’s bottom line. But the actual costs of operating a cinema chain would be low, analysts said, and the strategic benefits would make the outlay worthwhile.

Sony reported heavy losses on the entertainment side last year that were due to a one-time $2.7-billion write-off on its studio investment; the company’s hardware and operating divisions are money makers.

For the nine months ended Dec. 31, Sony sales were up 5.2%, but its entertainment units were down 1.7%.

Last week, Sony named marketing executive Nobuyuki Idei as its new president, a move analysts said signals increased attention to the movie, music and television sides of its business.