Harvey Weinstein's company enters talks with Trump-linked financier over potential sale

The Weinstein Company's co-chairman, Bob Weinstein, over the weekend denied the company was seeking to sell or shut down the company after his partner Harvey Weinstein was fired following reports of sexual harassment allegations.
The Weinstein Company's co-chairman, Bob Weinstein, over the weekend denied the company was seeking to sell or shut down the company after his partner Harvey Weinstein was fired following reports of sexual harassment allegations.PHOTO: AFP

NEW YORK (BLOOMBERG, NYTIMES) - The Weinstein Company has entered talks for a sale of the bulk of its assets with private equity firm Colony Capital, the two companies said in a statement on Monday (Oct 16). 

The company behind The English Patient and last year’s Oscars contender Lion said in the statement that Colony Capital had agreed to provide an immediate capital infusion into the business.

Colony’s founder and chief executive is Thomas J. Barrack Jr., a financier who is one of President Donald Trump’s closest outside advisers.  

Weinstein Company co-founder Harvey Weinstein has been at the centre of a widening crisis since The New York Times and The New Yorker revealed sexual harassment and rape allegations against him going back decades. He was fired by the company on Oct 8.

The company's co-chairman, Bob Weinstein, over the weekend denied the company was seeking to sell or shut down the company after his partner Harvey Weinstein was fired following reports of sexual harassment allegations.

Barrack, who made his fortune in real estate, is no stranger to media investments. He stepped in to save Michael Jackson’s Neverland Ranch from foreclosure.

“We will help return the company to its rightful iconic position in the independent film and television industry,” said Barrack. 

Brothers Harvey and Bob Weinstein founded Miramax in 1979, then sold it to Walt Disney Co. in 1993. The Weinsteins eventually left, and Disney sold the business in 2010 for US$660 million to a group that included a unit of the Qatar Investment Authority – and Barrack’s Colony Capital. 

When Qatar-based broadcaster BeIN Media Group. agreed to acquire Miramax in 2016, Colony made 3.5 times its equity, according to a person with knowledge of the matter who asked not to be identified since the terms aren’t public. 

‘Polaroid,’ ‘Paddington’

The Weinstein brothers founded Weinstein Co. in 2005 after leaving Miramax. Their company quickly secured its standing in pop culture, using savvy strategy to accumulate Academy Awards.
 
Weinstein Co. plans to release horror film “Polaroid” on Nov. 22 and “Paddington 2” on Jan 12. 

Barrack, 70, has a net worth of US$1.3 billion, according to the Bloomberg Billionaire’s Index. He was chairman of Trump’s inaugural committee. 

After founding Colony in 1991, Barrack made much of his fortune by investing in out-of-favour assets, including soured Middle East real estate and bad German real estate loans. His business took a downwards turn in the mid-2000s buyout boom, when multibillion-dollar investments in flashy casinos and trophy properties went south.

By 2010, Colony’s flagship private equity fund had lost 60 per cent of its value.  Barrack changed tack by backing away from the risky, high-profile leveraged buyouts that made him famous, instead turning to a series of investment vehicles that focus on lending and distressed property debt.

He took Colony public with little fanfare in 2015 by merging it with Colony Financial, a publicly traded real estate investment trust.

 

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