IMAX Corporation, thepioneer of large-format filmmaking and exhibition, has announced it isexploring "strategic alternatives" that include a possible sale or merger. Thecompany has retained Allen & Company and UBS Investment Bank as itsfinancial advisors in the strategy. The announcement coincides with the company's2005 financial results.

It's not the first time IMAXhas sought a buyer. In July 2000, the company hired Goldman Sachs andWasserstein, Perella & Co., then the company's largest shareholder, topursue sale and merger possibilities.

Since then, Wasserstein,Perella has sold its stake into the market, and IMAX has transformed into agoing concern. The company has successfully pursued its strategy of digitallyreformatting conventional Hollywood releases for exhibition in large-formatcinemas, essentially creating a new window and a marketing hook for tent-polereleases such as The Matrix and HarryPotter franchises and Spider-Man2. Yesterday, Sony announced itsplans to release its CG animation Open Season in IMAX 3-D in September.

Asked how this latest movediffers from the 2000 sale bid, IMAXco-chairman and co-CEO Richard Gelfond told, "In everypossible way. That was driven by Wasserstein, Perella. This is driven bymanagement. In 2000, the external environment was not very good for ourcustomer base [that is, exhibitors]. Now, that's improved. Second, IMAX boxoffice was up 35 per cent last year as opposed to down in the conventional boxoffice. Third, the company is coming off a terrific year that is really provingour business model - going into 2006 we have six DMR releases. The timing [fortoday's announcement] couldn't be better."

Together, Gelfond and hisco-chair and co-CEO Brad Wechsler are the largest individual shareholders witha combined stake of approximately 15%.

Imax dates back to 1967,when a group of Canadian filmmakers joined forces to improve on multi-screenprojections and developed a giant-screen format as well as specialised camerasand projectors. The original partners sold the company in 1994 to Wechsler,Gelfond and Wasserstein, Perella and was taken public later that year.

In 2005, IMAX completed 34cinema installations, including a record 14 in the final quarter, and reportednet earning of US$0.40 per share, higher than an anticipated by its marketguidance.