Imax Talks Draw a Crowd

One analyst believes the stock could fetch at least $12-$14.
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Big-screen producer

Imax

(IMAX) - Get Report

is attracting a wide swath of interest, according to sources.

The company, which makes its bones from showing Hollywood blockbusters in big-screen format and by licensing out its large-screen theater technology around the world, said earlier this year it was looking at strategic alternatives, including a sale. It hired Allen & Co. to direct the process.

Sources say that the company is well into a second round of offers. Observers expect the company to broker a deal within the next month or two.

Imax is garnering interest from a "variety of international and domestic companies," said one source, who declined to elaborate on the specific players.

Eric Wold, an analyst who covers Imax at Merriman Curhan Ford, estimates that at between $12 to $14 per share a deal could be worth $600 million or more, including cash and outstanding debt. Wold, who owns shares, has a buy rating on the stock.

"We have been pleased with the level of interest we have seen to date and how the process is going so far," Imax said in a statement. "We are currently evaluating preliminary bids and preparing for the second round of the process." It declined to comment further.

Likely suitors include the big movie studios, some international players, private equity concerns and technology companies. Sources say private equity interests have taken a front-row seat in the process.

Time Warner's

(TWX)

Warner Brothers has been the most active partner for Imax among the big studios, having released a slew of blockbusters in the format in the last two years. Films like

Harry Potter

,

Batman Begins

and

The Polar Express

have all generated incremental box office revenue for the studio. A Warner Brothers spokesman declined to comment.

Sony

(SNE) - Get Report

, which, of course, is both a technology and entertainment company, could make a "viable" buyer, according to Wold, because the company "could use it for the picture market or the home market."

Sony could try and engineer home-video-screen technology using Imax if it acquired the company. Sony didn't immediately return a call seeking comment.

Meanwhile, Warner Brothers and other studios might not appreciate another company having a right of first refusal on pictures being released in Imax.

Sony has previously released

Spiderman

in Imax, while

News Corp.'s

(NWS) - Get Report

20th Century Fox recently released

Robots

on Imax screens.

Still another possibility, according to Merriman's Wold, is that a technology company that's in the home-theater business could leverage on the technology side, while still licensing out Imax around the world.

Despite an uptick in theater signings and a slew of big releases in the format, Imax shares have spent five years languishing mostly in the mid- to high-single digits.

The company reports earnings on Tuesday, when it is expected to provide some color on the status of the sale process. Wall Street will be looking for the company to lose 7 cents a share on $26 million in revenue.

In Friday trading, shares of Imax were down 16 cents to $9.53.