Nov. 6 (Bloomberg) -- The power balance has shifted in London’s West End with the creation of a theater company bigger than those owned by Andrew Lloyd Webber and Cameron Mackintosh.

Investors in Ambassador Theatre Group, which paid 90 million pounds ($149 million) for 16 venues from Live Nation Inc. on Nov. 2, said the company will expand into large musical productions and make it easier for producers to get their work seen in London and other British cities. Critics have praised independent theaters and condemned the number of musicals being shown instead of new plays in the West End.

Ambassador, a U.K. theater owner founded in 1992, becomes the country’s biggest owner, running 39 playhouses and managing more than 11,000 West End seats, the company said in a statement. It already owns nine West End venues. Key Brand Entertainment, which bought Live Nation’s theatrical assets in North America last year for $90 million, filed a lawsuit in Los Angeles County Superior Court on Oct. 30, saying the U.K. purchase broke auction rules and should be halted.

“It will put them on a par with Lloyd Webber and Mackintosh, who between them own the largest theaters in the West End,” Mhora Samuel, director of the Theatres Trust, said in a telephone interview. The trust acts as the U.K. government’s theater adviser.

The acquisition was funded by Exponent Private Equity LLP, with backing from Greg Dyke, the former director general of the British Broadcasting Corp., and property entrepreneur Peter Beckwith, Ambassador said.

‘One-Stop Shop’

“For the producers who do the shows, this will actually make their lives easier in terms of scheduling,” Chris Graham, a partner at Exponent, said in an interview. “This will effectively be a one-stop shop for them.”

Ambassador will gain greater ticketing and marketing operations from the acquisition, “which I think will help to sell more tickets,” the company’s co-founder Howard Panter said in an interview. “If we can grow the cake, it will help producers and investors in productions.”

Live Nation, the world’s largest music promoter, is selling some assets to focus on concerts before its planned merger with Ticketmaster Entertainment Inc., which would create a group with $6 billion in annual sales.

The U.K. Competition Commission last night said that it’s considering new evidence in a review of the proposed merger of Ticketmaster and Live Nation and put off publication of its findings until Jan. 19, 2010. The U.S. Justice Department also is reviewing the merger. In a preliminary ruling issued on Oct. 8, the U.K. regulators said the combination may curb competition and “severely inhibit” the entry of a competitor.

‘Lion King’

Live Nation sold to Ambassador the 2,300-seat Apollo Victoria, which is currently playing the musical “Wicked,” and the 2,100-seat Lyceum Theatre, which is hosting Walt Disney Co.’s “Lion King.” Panter said he anticipates the shows will stay at the playhouses. Both shows are performing better than they did last year, he said.

“It’s not like you’re selling office buildings and if you miss this one, you can buy the one two blocks down,” John Hopmans, executive vice president for mergers and acquisitions at Live Nation, said in an interview. “This is a once-in-a- lifetime set of assets.”

“The larger the theater is, and if it’s in the West End, it is probably going to operate commercially very well,” said Samuel. “Some will be extremely profitable for them and they will help to accommodate the others that are perhaps less so.”

Ticket Sales

Increasing numbers of people are going to shows in the West End as American and European tourists benefit from the weakness of the pound, according to the Society of London Theatre. A total of 8.79 million people visited West End theaters in 2009 through the week ending Aug. 15, an increase of 4 percent on the same period the previous year, the organization said in a release.

“It will make programming and planning easier for producers,” Steve Potts, commercial director at production company Bill Kenwright Ltd., said in an interview about the Ambassador purchase. “The regions are where the biggest impact will be seen. Howard and his team are prolific refurbishers of theaters. Knowing you’ve got someone who cares about the venues is a big part of the battle.”

Lloyd Webber, the composer of “Phantom of the Opera,” Broadway’s longest-running show, owns six West End theaters through his Really Useful Group, while Cameron Mackintosh, the producer of “Les Miserables,” owns seven playhouses through his Delfont Mackintosh company.

A spokeswoman for Really Useful Group declined to comment and a spokesman for Delfont Mackintosh was not immediately available to comment.

Beverly Hills, California-based Live Nation rose 37 cents to $7.12 in New York Stock Exchange composite trading. The shares have risen 24 percent this year.

To contact the reporter on this story: Jonathan Browning in London jbrowning9@bloomberg.net.

Last Updated: November 5, 2009 19:00 EST