(Yicai Global) Nov. 5 -- Shares in Wanda Film Holding opened 10 percent down this morning after the cinema operator allowed public trading for the first time since July 2017 and said it planned to acquire another Wanda unit for less than originally planned.
The stock [SHE:002739] was worth CNY31.1 (USD4.51) a share when the Shenzhen bourse closed at 3 p.m., unmoved all day.
The Beijing-based firm plans to buy a 96.8 percent stake in sister company Wanda Media, a film producer and distributor, for CNY10.7 billion (USD1.6 billion), it said in a statement yesterday, responding to an inquiry about the transaction from the Shenzhen Stock Exchange. Wanda Film requested trading be suspended in July 2017 so it could pursue the deal.
It previously planned to pay CNY11.6 billion for the shares via a partial cash payment and new stock issuance, but now plans to settle the deal using only shares, it added. The new deal pegs the target's total value at CNY11.6 billion.
The merger has been in the works since May 2016, when Wanda Film valued Wanda Media at CNY37.2 billion (USD5.4 billion) and was expected to incorporate California-based Legendary Entertainment, which parent Wanda Group acquired the same year, into its restructuring.
The reshuffle no longer contains plans for Legendary, with Wanda Film saying that as a foreign asset, the company is irrelevant to its plans to focus on cementing its leading spot in the Chinese market. It will instead include Beijing-headquartered Innovation Media Power Culture Communication to explore connections between television and film.
Editor: James Boynton