Paramount, Warner Bros. prepare to sell Mann Theaters.

The Mann Theaters marriage of Paramount Pictures and Warner Bros. appears to be headed for divorce.

The two movie studios are partners in Encino-based Cinamerica Theatres LP, which owns the Mann chain. But Cinamerica officials confirmed last week that the chain will likely be sold to an investment group headed by the former executive of a Pittsburgh-based theater chain.

"There are serious discussions underway," said Charles Goldwater, president of Cinamerica. "There is no deal yet."

Goldwater would neither confirm nor deny published reports that the purchase price is $165 million.

Gulf & Western, the former parent of Paramount. bought the Mann chain in 1986 for $220 million. Two years later, Warner Bros. bought a 50 percent stake in the company for $150 million.

The purchase deal is being led by Jeff Lewine, the former president of CinemaWorld, the Pittsburgh-based theater chain now owned by New Orleans-based Carmike Cinemas.

Paramount and Warner Bros. have been looking to divest themselves of the Cinamerica/Mann chain for several years, but Lewine's bid was unsolicited.

"When somebody comes to you and throws you a lot of money, you have to consider it," said Barbara Brogliotti, senior vice president for corporate communications at Warner Bros. "They approached us."

Lewine, president of Pittsburgh-based J.J. L. Consultants, was unavailable for comment.

The sale is expected to be concluded within the next 60 to 90 days. according to industry sources. Financing is being handled by the New York-based investment firm of E.M. Warburg, Pincus & Co.

"I think we turned the business around," said Goldwater. "We did a lot of good, which is ironic because that is what made us so attractive."

Mann, which operates mostly in Colorado and California, runs 66 theaters with more than 400 screens. Its L.A. movie houses include the venerable Chinese Theater in Hollywood and the Bruin and Village theaters in Westwood.

Warner Bros. and Paramount have been under growing pressure to reduce the massive debt created by Viacom's takeover of Paramount and the Warner Communications merger with Time Inc., as well as Time Warner Inc.'s more recent purchase of Turner Broadcasting System.

"I think Warner and Viacom are being pressed to sell assets to reduce their debt load, and they will be getting a high multiple (for Mann)," said Steve Cesinger, managing director of Los Angeles-based investment finn Greif & Co. "They want to free up their cash flow."

Cesinger described Cinamerica/Mann as "a strong chain with no significant problems."

Viacom recently sold its stake in the USA Network for $1.7 billion, a move that will help the company reduce its $10 billion debt. Time Warner's debt is $12.7 billion.

"Their war cry is to pay down their debt," said Arthur Rockwell, an analyst at Yeager Capital Markets.

One major Los Angeles-based exhibitor said that money problems aside, the Paramount and Warner partnership in Mann never really jelled.

"Paramount and Warner Bros. always had different agendas," the exhibitor said. "There was always a conflict in management styles and it never really worked. (Mann) has been on the market for five years. It's like a baseball team, you can only have one manager."

Brogliotti denied that there was any strife between Warner Bros. and Paramount.

Paramount officials declined comment on the deal.

Viacom, in addition to its ownership in Cinamerica/Mann, owns Famous Players Theaters in Canada, which represents 46 percent of the movie houses in that country.

The company also owns a 50 percent interest in United Cinema International, which has screens in Japan. the United Kingdom, Spain. Germany and Japan. It also owns National Amusements, which has screens here and abroad.

Developer Ira Smedra, whose Arba Group is seeking to develop a new shopping center in Westwood that would include a movie complex, said he was disturbed by the pending sale.

He said he had made a major financial commitment to the area in the belief that Mann would become his group's theater operator.

"Our negotiations with Mann and its co-owners, Paramount and Warner Bros.. have been frustrating and now it is becoming clearer why," he said.

"We are confused as anyone as to what Mann really plans to do in the Village," Smedra said in a statement.

Goldwater said he was "surprised" at Smedra's statement. "As recently as (Wednesday, Oct. 8) his attorney contacted us to see how we could move forward on issues that are outstanding," he said.

Goldwater said the pending Lewine buyout would not affect Smedra's deal because the proposed new owners are aware of the project. He also said the takeover would not affect a deal with Regent Properties to operate a multiplex on the now-existing Regent-Four Plex, Festival and National theaters in Weswood.

Also unaffected, he said, are plans to expand the Mann Chinese Theater theme around the country. The first of these entertainment centers, which will use the Chinese theater name, is being built in southeast Denver.

Goldwater added that Mann has no plans to stop the development of an entertainment center on Hollywood Boulevard called the Hollywood Highland Project that would extend from the Chinese Theater to Highland Boulevard.