China’s Wanda Cinema Line is to buy Hoyts Group, Australia’s second largest chain of movie theaters.
The transaction was revealed in a regulatory filing by Wanda Cinema, which is a unit of the giant Dalian Wanda group which also owns North American cinema chain AMC Entertainment.
The value of the transaction was not disclosed by Wanda. nor was the means of payment. However, the price tag is likely to be in excess of US$750 million (A$900 million). That is the price understood to have been paid in December 2014 for the chain by ID Leisure Ventures, a Chinese investment and property company headed by Sun Xishuang who has very close and friendly relations with Dalian Wanda.
ID acquired Hoyts from private equity group Pacific Equity Partners, which had owned the circuit since 2007. In early 2014 PEP considered giving Hoyts an IPO on the Australian Stock Exchange, but later settled on a trade sale.
Dalian Wanda may have had its eye when PEP put the chain on the market earlier last year. But making the purchase would have been logistically difficult as, at the end of 2014, it was in the process of listing Wanda Cinema Line on China’s Shenzhen Stock Exchange and Wanda Commercial Properties in Hong Kong.
Sun also heads property developer Dalian Yifang and owns a 6.3% stake in Wanda Commercial Properties and a 4.2% stake in Wanda Cinema Line.
Wanda Cinema Line is China’s largest private sector cinema operator with over 150 multiplexes in 80 cities. Hoyts operates some 450 cinema screens in Australia.
The move further underlines the Wanda group’s moves into entertainment and leisure and also into Australia.
Wanda is building China’s largest film studios on a site in Qingdao which will house 30 sound stages and a film festival center. Earlier this year Wanda also bought control of Infront Sports & Media AG for Euros1.05 billion ($1.15 billion) after making a Euros45 million investment in Spanish soccer club Atletico Madrid.
Wanda recently announced the building of a $970 million hotel and apartment complex in Queensland’s Gold Coast. Last month it announced the opening of a new air route between Gold Coast and Wanda’s heartland, Wuhan.
“We look forward to the investment and development of Hoyts going forward under the ownership of a new investor, ID Leisure,” said Hoyts chief executive Damian Keogh in a statement in December 2014, at the time of the ID takeover. “Hoyts is embarking on a number of exciting opportunities and together with ID Leisure, we will continue to invest in the exceptional customer experience currently offered to 20 million attendees annually.”