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Two Chinese investors exit investments in Wanda's Legendary Entertainment
[SHANGHAI] Two investors have sold their stakes in Legendary Entertainment LLC, the film producer billionaire Wang Jianlin's Dalian Wanda Group Co bought last year in the biggest acquisition of a Hollywood asset by a Chinese company.
Oceanwide Holdings Co and Zhejiang Huace Film & TV Co disposed their combined 1.56 billion yuan (S$319 million) in holdings, according to footnotes inside the sellers' first-half reports released last month. The two, which participated in a US$1.5 billion fundraising shortly after Wanda bought Legendary for US$3.5 billion to access franchises such as the "Godzilla" and "Pacific Rim" movies, sold their holdings back to the Chinese conglomerate, according to people familiar with the transaction who asked not to be identified discussing a private matter.
It's the latest twist involving a company that symbolised China's push into Hollywood. Wanda, which has been facing government scrutiny this year over its acquisitions, has been struggling to capitalise on its purchase by getting the film producer injected into a listed entity. Wanda promised to buy back shares from Legendary investors and offer them a 15 per cent return if the producer failed to be listed on the stock market within 12 months - a deadline that's now lapsed - according to a presentation in January 2016 to investors seen by Bloomberg News.
Wanda declined to comment on the investors' exit. Huace also declined to comment, while a representative at Oceanwide said the company is looking into the matter and may respond later. Legendary declined to comment.
Oceanwide sold its 1.44 billion yuan stake in Legendary's holding company, Qingdao Wanda Film Investment Co, after acquiring the holdings in March 2016. Zhejiang Huace disposed of its stake for 133.4 million yuan, getting a 16 per cent return on the investment.
As to Legendary, the company said in July that it's well capitalised to fund its film-and-TV slates and operate its business as usual, after news emerged that Wanda was being scrutinised by the Chinese government for its overseas investments. The producer has also seen its share of leadership changes this year, with founder Thomas Tull leaving in January and Legendary East chief Peter Loehr departing in June 1, leaving Wanda Cultural Industry Group senior vice-president Jack Gao in charge as interim chief executive.