April 23 (Bloomberg) -- Madison Dearborn Partners and J.P. Morgan, which snapped up Cinemark USA Inc. and AMC Entertainment Group during Hollywood's slump three years ago, plan to take the theater chains public now that ticket sales are booming.

Cinemark, controlled by Madison Dearborn and Quadrangle Group LLC, sold $532 million of shares today in the Plano, Texas-based exhibitor taken private in March 2004. AMC, bought by J.P. Morgan Partners and Apollo LP in December 2004, may raise $789 million in a May 3 initial public offering.

The private-equity investors are betting a strong summer schedule with Sony Corp.'s ``Spider-Man 3'' and Walt Disney Co.'s ``Pirates of the Caribbean: At World's End'' will spur ticket sales and demand for the companies' shares. Box-office sales have gained 6.4 percent to $2.47 billion this year and attendance is up 4 percent, according to Media By Numbers LLC.

``This is going to be a great summer for theater owners,'' said David Bank, a New York-based analyst at RBC Capital Markets. ``There's an unbelievable amount of marketing dollars being spent to promote these films over the next couple months.''

Cineworld Group PLC, the U.K.'s second-biggest cinema chain, said today it will sell shares for 155 pence to 185 pence each. The company, owned by Blackstone Group LP, will have a market value of as much as 246 million pounds ($493 million). The shares are slated to begin trading in London on April 27.

Cinemark, Madison Dearborn and other investors sold 28 million shares at $19 each, representing 26 percent of the company. The figure doesn't include overallotments. Chicago- based Madison Dearborn made its initial $518 million investment at $7.38 a share.

The firm raised about $210 million while reducing its stake to 47 percent from 66 percent. Quadrangle now owns 5 percent, down from 7.1 percent.

Theater Revival

Cinemark Chief Financial Officer Robert Copple and Steve Anreder, a spokesman for Apollo, didn't return calls seeking comment. Madison Dearborn managing director Mark Tresnowski wasn't immediately available to comment, nor was Robb Malin, a spokesman for Quadrangle. AMC spokeswoman Melanie Bell said the company wouldn't comment on its IPO plans. Brooke Harlow, a spokeswoman for JPMorgan declined to comment.

Lehman Bros., Credit Suisse, Merrill Lynch & Co. and Morgan Stanley are managing the Cinemark IPO.

Private equity firms purchased theater chains as ticket sales stumbled 4 percent to 1.52 billion from a 2002 record of 1.58 billion. After being acquired, AMC and Cinemark bought theater companies to compete with Knoxville, Tennessee-based Regal Entertainment Group, the industry's largest owner.

Consolidation

Cinemark paid $681 million in October for San Rafael, California-based Century Theaters, adding 77 cinemas with more than 1,000 screens in 12 states. Kansas City, Missouri-based AMC bought Loews Cineplex Entertainment Corp. in January 2006, adding 221 theatres with 2,218 screens in the U.S. Mexico, South Korea and Spain.

AMC investors, including Bain Capital Investors LLC, The Carlyle Group and Spectrum Equity Investors LP, paid $1.3 billion for the company. After selling a 27 percent stake in the IPO, the value of the company will be $2.9 billion. AMC's owners are offering 39.5 million shares at $18 to $20 each.

Goldman, Sachs & Co., Citigroup Inc., Deutsche Bank Securities and JPMorgan are managing the AMC sale.

AMC and Cinemark weren't profitable last year, reflecting the box office slide and costs to finance debt. Regal reported a 6 percent drop in net income last year and a 16 percent decline in the fourth quarter.

AMC's Loss

AMC's loss widened to $224.3 million in the 52 weeks ended March 31 from $114.7 million a year earlier. Sales fell to $2.39 billion from $2.53 billion. AMC, which had $2.46 billion of debt as of March 31, won't receive proceeds from the share sale.

Cinemark had revenue of $1.6 billion in 2006 and a loss of $3.5 million, according to a regulatory filing. The company plans to use its $233.6 million in IPO proceeds to reduce debt, which stood at $2.03 billion in December.

Cinema owners had struggled after building too many theaters in the late-1990s, said William B.F. Kidd, an analyst with Los Angeles-based Wedbush Morgan Securities.

Owners borrowed to build locations with stadium seating, better sound systems and other features. When box office sales fell, many theater owners were forced to shutter cinemas.

Theater owners may need to borrow even more to upgrade traditional projectors with new digital versions that can cost about $75,000 per screen. Regal and Cinemark joined last month with Time Warner Inc.'s Warner Bros. and General Electric Co.'s Universal Pictures to create a company to help cinemas convert.

``What you see now is a number of companies coming to market that have regrouped,'' Kidd said in an interview. ``But not everyone has fully recovered from that over-building.''

Shares of Regal fell 55 cents to $20.58 at 4 p.m. in New York Stock Exchange composite trading. They have fallen 3.5 percent this year.

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

Last Updated: April 23, 2007 21:12 EDT