New | Chinese entertainment giant LeEco to build up video content in Shenzhen unit

Chinese entertainment giant LeEco plans to boost its online video content through an injection of its film production affiliate Le Vision Pictures into its Shenzhen-listed arm to drive growth in paid subscribers and advertising income amid rising competition.

Leshi Internet Information & Technology, controlled by LeEco’s chairman Jia Yueting, said it has agreed to acquire Le Vision Pictures for 9.8 billion yuan (HK$11.7 billion), the Shenzhen-listed company said in a filing to the stock exchange on Friday night.

Leshi, which runs LeEco’s online video-streaming site, will issue 165 million shares at 41.37 yuan per share to Le Vision Pictures’ shareholders for a 69.6 per cent stake, and the remaining will be settled by a cash payment of 2.98 billion yuan, according to the statement.

The price of the share sale represents a 29.1 per cent discount to Leshi’s last closing price of 58.8 yuan per share. Trading in the company’s shares has been suspended since December 7 , and no schedule for trading resumption was provided in Friday’s filing.

The company will also sell new shares to five unnamed investors to raise 5 billion yuan to fund the deal. The proceeds will also be used to replenish working capital and contribute to new film production projects.