China’s Wanda Cinema Line confirms Hoyts acquisition

The Chinese company said in a regulatory filing that its board had approved the purchase of a 100% stake in Hoyts, without giving further financial details. When the deal was first announced the buyer was identified as an investment vehicle set up by Xishuang Sun, chairman of property developer Dalian Yifang. Much of Sun's wealth is now said to come from his stakes in assets owned by Wanda Group.

PEP ran a dual-track process targeting a trade sale or an IPO, and it was suggested earlier last year that a public offering would seek to raise around A$900 million ($731 million).

According to AVCJ Research, PEP bought Hoyts for $440 million in 2007 from PBL and West Australian Newspapers. There have been several roll-up acquisitions and Hoyts is now the second-largest cinema operator in Australia, with 450 screens across Australia and New Zealand. Other assets include movie rental business Hoyts Kiosk and Val Morgan, the dominant player in cinema advertising in Australia.

Wanda Cinema Line is China's largest movie theater chain, accounting for 15% of total box office sales in the country. It filed for a Shenzhen IPO last October, targeting up to RMB2 billion ($326 million), although the offering was ultimately scaled back to RMB1.28 billion. The stock debuted in late January and is currently trading at a more than 1,000% premium to its IPO price.

At the time of the listing, Sun was the second largest shareholder in Wanda Cinema Line after Wanda Group with a 4.2% stake. Other backers included Tsinghua Holding Capital, an investment arm of Tsinghua University, and Sequoia Capital. Sun also has a 6.3% interest in shopping mall development business Wanda Commercial Properties, which raised $3.6 billion through a Hong Kong IPO last year.

Wanda Group - which, like Yifang, hails from the northeastern China city of Dalian - is controlled by billionaire Jianlin Wang. In 2012, it acquired US-based cinema chain AMC Entertainment from several PE firms for $2.6 billion. AMC went public in the US in 2013, raising about $332 million.

Wanda Group is also constructing a movie studio and entertainment complex in the eastern China city of Qingdao at an estimated cost of RMB50 billion.

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