DALLAS CHAIN TO BUY LANDMARK.

Byline: Dave McNary Daily News Staff Writer

A Dallas-based theater chain agreed Wednesday to buy Los Angeles-based Landmark Theatres, the nation's largest art-house specialist, for $65 million and pledged to expand and upgrade the 140-screen operation.

The deal by Silver Cinemas International reflects both the growing interest in independent films and the sweeping consolidation of the major U.S. movie chains in recent months as deep-pockets investors scramble to modernize facilities.

Silver, a little-known circuit with 350 screens, has made seven acquisitions since June 1996 and is backed by Los Angeles-based Brentwood Associates. It was widely rumored to be the leading bidder for Landmark, which has become increasingly attractive because of the success of art-house movies such as ``The English Patient.''

Landmark has prime sites in most top U.S. markets - including the Samuel Goldwyn Pavilion Cinemas and the Nuart theater in West Los Angeles, the Rialto in South Pasadena, and the NuWilshire in Santa Monica - and a well-regarded management team. It is expanding Pavilion Cinemas to 16 screens, making it the nation's largest art-house complex, and adding four screens at the Rialto.

Analyst Kevin Skislock of L.H. Friend, Weinress, Frankson & Presson said Landmark needs to upgrade and expand to compete against new 30-screen megaplexes. ``The art-house chains have a valuable niche but the gap between older facilities and megaplexes is going to become too wide soon,'' he said.

Landmark had been put up for sale in August by billionaire John Kluge through his Metromedia International Group.