FILE PHOTO: A model stands in front of a video presentation before the start of an official signing ceremony between Wanda Group, one of China's largest theatre owners, and AMC Entertainment, the world's largest operator of IMAX screens, in Beijing May 21, 2012. REUTERS/David Gray/File Photo

LONDON (Reuters) - AMC Entertainment Holdings AMC.N is working with Citi C.N on an initial public offering (IPO) of Britain's Odeon cinemas group, three sources familiar with the matter said.

New York-listed AMC said in November it may pursue a London IPO of Odeon, which now includes Nordic Cinema, the largest cinema chain in the Nordic and Baltic regions, by the middle of 2019, keen to take advantage of higher valuations in European markets.

“It has not escaped our notice that even though European public markets value movie theaters at double-digit EBITDA (earnings before tax, interest, depreciation and amortization) multiples, we are not seeing such valuations for our European assets at these levels when they are buried within AMC,” AMC Chief Executive Adam Aron said on a call in November.

Three sources familiar with the matter said Citi was working on a London float for the chain, which could value it at more than $2 billion. AMC, which is majority owned by China’s Dalian Wanda Group, has been introducing recliner seating and alcohol sales in European cinemas to help boost returns.

Citi, which advised AMC on its $652 million Nordic Cinema acquisition in 2017, declined to comment. AMC, which operates around 1,000 theaters with approximately 11,000 screens globally, did not respond to an emailed request for comment.

The adjusted EBITDA for AMC’s international business grew 4.4 percent in the fourth quarter to $92.8 million and 7.8 percent to $244.8 million for the full year on a constant currency basis.

According to Reuters data, AMC is trading at enterprise value of around 8 times EBITDA while Odeon competitor Cineworld CINE.L is trading at enterprise value of 17 times EBITDA. Based on these estimates, Odeon could achieve a valuation of between $2 and $4 billion including debt.

AMC is in discussions to expand to Saudi Arabia as the kingdom lifts a 35-year ban on cinemas. Saudi sovereign wealth fund, Public Investment Fund a likely partner and source of capital.

AMC shares closed down 0.75 percent on Wednesday at $13.5.