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China’s Wanda Omits Legendary From Film Business Consolidation

Variety logo Variety 7/11/2017 Patrick Frater
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Stock market-listed Wanda Film Holdings is to buy up Wanda Media in the latest reshuffle of businesses within the Dalian Wanda property-to-entertainment giant.

Wanda Film’s shares are suspended from trading on the Shenzhen Stock Exchange, and the company says it needs a month to undertake the restructuring. The company says it will reveal details of the  restructuring on Aug. 3 and that the shares should return to active trading within a month.

No details of the valuation of the Wanda Media business was provided in a brief regulatory heads-up. But it appears that Legendary Entertainment will not be part of the reorganization that the company says could result in a new share offering.

Dalian Wanda Chairman Wang Jianlin has told investors that Legendary will not be listed in China. That position was reiterated by Wanda sources to Variety.

Legendary was acquired by Wanda for a figure that the company reported at the time as being up to $3.5 billion. But huge annual losses at the studio have caused problems. Wanda’s previous plans to consolidate its film businesses were halted in spring of last year, when regulators halted a refinancing scheme.

Since then Legendary has enjoyed box office success in China with “The Great Wall,” “Warcraft,” and “Kong: Skull Island.” But those same titles were disappointments on the international scene. Legendary founder Thomas Tull exited the company earlier this  year, followed at the end of May by Peter Loehr, CEO of Legendary East, an offshoot intended to produce Chinese-themed blockbusters for a world audience. Legendary is currently being operated by senior Wanda executive Jack Gao in an interim capacity, along with Mary Parent.

On Monday, Dalian Wanda sprung a major surprise when it announced that it would sell off its theme park businesses and a selection of its hotels in a $9 billion deal with fellow property developer Sunac China.

Wanda has become one of the most powerful companies in the global movie industry through high-profile acquisitions in the exhibition sector, where it has acquired AMC and Carmike in North America, Hoyts in Australia and Odeon-UCI and Nordic Cinema in Europe.

Additionally, it has invested in individual Hollywood titles and was a corporate bidder when Paramount Pictures was temporarily put on the auction block. While that takeover bid was thwarted by changing strategies within Paramount’s parent Viacom, its $1 billion offer for Golden Globes producer Dick Clark Productions was upended by changing regulations within China.

Financial regulators in China last month revealed that they asked state-controlled banks to look into their lending patterns towards Wanda and a handful of other conglomerates whose recent growth has been propelled by large overseas acquisitions.

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