Lai Sun Hotels International (LSHI) will acquire a 55 per cent interest in ownership distribution rights of motion pictures and television drama programmes from China Star Entertainment, for about $110 million. This marks the first move by LSHI, which owns and operates hotels in North America and Asia, into entertainment-related business. Keith Wu Shiu-kee, executive director of debt-laden Lai Sun Development, said: 'More [diversifications] are expected to come.' Lai Sun Development, chaired by Peter Lam Kin-ngok, owns about 52 per cent of LSHI. As part of the deal, LSHI and China Star Entertainment will form a 55-45 new joint venture - China Star WebTV.com. China Star Entertainment, chaired by Charles Heung Wah-keung, is involved into production and distribution of films and TV programmes. The new venture will buy, operate and distribute 400 locally and foreign-produced motion pictures and 396 hours of Chinese-language television drama programmes from China Star Entertainment. China Star WebTV will also have the rights of first refusal to acquire the Internet rights and the distribution rights for cable TV in Hong Kong and Macau of future motion pictures and TV programmes produced and acquired by China Star Entertainment for a term of 10 years. Vincent Lien, who recently replaced Mr Lam as chairman of LSHI, said total outlay for the acquisition was $200 million. The capital would be paid on a pro rata basis, which meant LSHI would pay $110 million for the investment. LSHI and China Star Entertainment will invest a further $20 million into the new venture on pro rata basis within 12 months. The joint venture initially will concentrate on the distribution of the motion pictures and TV programmes through cable channels such as cable television operators in Hong Kong and overseas. Mr Lien said it was sensible for LSHI to diversify into such a sector. The hotel business run by LSHI was leisure-related, while China Star WebTV's business was also leisure-orientated, he said. Mr Wu said the firm's diversification plan so far did not involve any asset injection of Lai Sun Development's shares in Sunday, the mobile phone-network operator in Hong Kong, he said. The group had no plans to inject Lai Sun Development's shares in ATV into the new joint venture.