2 China investors sell stakes in Wanda's Legendary

Oceanwide Holdings and Zhejiang Huace Film & TV, which participated in a US$1.5 billion (S$2 billion) fund-raising after Wanda bought Legendary for US$3.5 billion to access franchises like the Godzilla and Pacific Rim (above) movies, sold their stake
Oceanwide Holdings and Zhejiang Huace Film & TV, which participated in a US$1.5 billion (S$2 billion) fund-raising after Wanda bought Legendary for US$3.5 billion to access franchises like the Godzilla and Pacific Rim (above) movies, sold their stakes back to the Chinese conglomerate, said people familiar with the transaction.PHOTO: WARNER BROTHERS

SHANGHAI • Two investors have sold their stakes in Legendary Entertainment, the film producer that billionaire Wang Jianlin's Dalian Wanda Group bought last year in the biggest acquisition of a Hollywood asset by a Chinese company.

Oceanwide Holdings and Zhejiang Huace Film & TV disposed their combined 1.56 billion yuan (S$319 million) in holdings, according to footnotes in the sellers' first-half reports released last month.

The two, which participated in a US$1.5 billion (S$2 billion) fund-raising after Wanda bought Legendary for US$3.5 billion to access franchises like the Godzilla and Pacific Rim movies, sold their stakes back to the Chinese conglomerate, said people familiar with the deal asking not to be identified. It is the latest twist involving a firm that symbolised China's push into Hollywood.

Wanda, which has been facing government scrutiny this year over acquisitions, has been struggling to capitalise on its purchase by getting the producer injected into a listed entity. It promised to buy back shares from Legendary investors, offering a 15 per cent return if the producer failed to be listed within 12 months - the deadline has lapsed - according to a January 2016 presentation to investors seen by Bloomberg News.

Wanda and Huace declined to comment on the investors' exit, while a representative at Oceanwide said the firm 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, 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.

Legendary said in July it is well capitalised to fund its film and TV slates and operate its business as usual, after news emerged that Wanda was being scrutinised.

The producer has seen its share of leadership changes this year, with founder Thomas Tull leaving in January and Legendary East chief Peter Loehr departing on June 1, leaving Wanda Cultural Industry Group senior vice-president Jack Gao in charge as interim chief executive.

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A version of this article appeared in the print edition of The Straits Times on September 28, 2017, with the headline '2 China investors sell stakes in Wanda's Legendary'. Print Edition | Subscribe