Movies

Legendary buys out China’s Wanda ownership stake

BBG News

As someone who has been closely following the Hollywood scene for decades, I must say that the buyout of Legendary Entertainment by Apollo Global Management marks a significant shift in the industry dynamics, particularly between Hollywood and China. The fact that the company self-financed this transaction with cash on its balance sheet is a testament to its financial strength and strategic vision.

I’m thrilled to share that the production powerhouse, Legendary Entertainment, has purchased the remaining half ownership previously held by the Chinese conglomerate, Wanda Group. This move seems like the final chapter in a tale of ambition, as it signifies the winding down of China’s aspirations to dominate Hollywood on a grand scale.

Legendary Entertainment announced on Monday that they financed their deal with cash from their own resources without relying on external funding. They mentioned they still possess ample funds for running their ongoing operations and future growth projects. The specific amount paid to acquire Wanda’s stake wasn’t revealed, but CEO Josh Grode described it as a “favorable price.

With the acquisition now finalized, Legendary Entertainment is now under exclusive control of its management team and funds managed by Apollo Global Management, who previously acquired a minority stake in the company in 2022 for $760 million, which significantly reduced Wanda’s ownership share.

Last year, Legendary also got a five-year, $800-million loan led by J.P. Morgan.

“It’s just a exciting moment for the company,” Grode told The Times in an interview.

After company management and Apollo each owning approximately equal shares of Legendary, they now jointly control the board. This means we are fully in sync to maximize the value we’ve created within the business. We can now delve into strategic growth possibilities that might have been limited due to international shareholders’ involvement, according to Grode.

Back in 2016, I, as a dedicated cinephile, made a significant move by acquiring Legendary for a whopping $3.5 billion in a deal that underscored the burgeoning relationship between Hollywood and China. At the time of this acquisition, Wanda chairman Wang Jianlin expressed our ambition to secure a “global industry position” and even planned to construct what we claimed would be the “world’s largest film and television studio” right in the heart of Qingdao, eastern China.

However, the company eventually abandoned its initial strategy and encountered stronger resistance when trying to penetrate Hollywood’s market, as the Chinese government tightened restrictions on outbound investments, especially in sectors like media and entertainment.

As a film enthusiast, I’d say the decision to acquire Legendary Entertainment from Wanda now is a mix of several elements that seemed just right. One key factor was the abundance of surplus funds within the business – a significant amount of excess liquidity, if you will. It’s important to note that Wanda did not hold voting control over the company.

He stated, “They held a significant portion of the company’s stocks, and we had the potential to convert their business investment into financial gains.

2004 marked my entry into the world of film production with Legendary Entertainment. Over the years, we’ve carved out a reputation by backing blockbusters like “Batman Begins” and the “Hangover” series. Lately, our success story continues with the “Dune” films, and we made waves by selling the Millie Bobby Brown-led “Enola Holmes” to Netflix.

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2024-10-14 20:31

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