China’s Wanda Cinema to acquire PE-backed Wanda Media for $5.7b
Wanda Cinema Line, China’s largest cinema chain operator, plans to acquire its movie-making affiliate Wanda Media, which is backed by several PE investors, for RMB37.2 billion ($5.7 billion) in a cash and stock swap.
According to a filing, Shenzhen-listed Wanda Cinema's purchase of Wanda Media will facilitate an exit for 33 existing shareholders, including Hony Capital, which holds a 6.72% stake in the unit.
In February, Dalian Wanda Group - the ultimate parent of both companies - sought to raise RMB10 billion from domestic investors for Wanda Media ahead of a planned onshore listing. The share issue was fully subscribed. At the time, Wanda said the subsidiary would list through a reverse merger, an IPO or a merger with one of its listed companies.
In addition to the share swap, Wanda Cinema plans to raise up to RMB8 billion through a private placement to help fund the transaction.
Wanda Media was founded in 2011 and comprises film production and distribution business Wanda Pictures as well as Hollywood film production studio Legendary Entertainment - acquired by Wanda for $3.5 billion earlier this year. Upon completion of the deal, Wanda Group's film subsidiaries will exist under one publicly listed entity.
Wanda Cinema is China's largest movie theater chain, accounting for 15% of total box office sales. It is backed by a string of PE investors including Tsinghua Holdings and Sequoia Capital. Following a Shenzhen A-share listing last year, the cinema chain bought Australian cinema operator Hoyts Group from Pacific Equity Partners (PEP).
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