Wanda mulls sport unit IPO and sale of overseas assets: sources
The IPO would most likely take place in Hong Kong, but bankers have also pitched for a US listing, according to the sources
Dalian Wanda Group is considering a Hong Kong listing for its sports assets as part of efforts to rationalise its portfolio that could also include other sales, according to five sources who talked exclusively to Reuters.
The conglomerate last month tapped investment banks for a potential initial public offering of its sports businesses, three of the sources said. Citic Securities, China’s largest brokerage, is one of the banks involved, added one of them. A spokesman for Citic Securities declined to comment.
Wanda’s businesses range from real estate to football and cinemas but it has been rattled in the past year as Beijing tightens control over companies’ offshore investments and high leverage. The company is owned by Wang Jianlin, one of China’s richest men.
In November the Chinese conglomerate said it was offering to sell all five of its large-scale projects in London, Chicago, Los Angeles, Sydney and Australia’s Gold Coast, to a single buyer for an estimated US$5 billion.
An IPO of Wanda’s sports assets would include Infront Sports & Media AG, a Swiss sports marketing company and World Triathlon Corp, the organiser and promoter of the Ironman race, according to three of the people. The two were acquired in 2015 for US$1.2 billion and US$650 million respectively.
The share offering would also include Wanda’s smaller sports assets in China, such as cycling and basketball leagues, one of them said.
The public float would not involve Wanda’s 20 per cent stake in the Spanish football club Atletico Madrid, valued at €67 million (US$80 million) after a recent capital raise, the source said.
The IPO would most likely take place in Hong Kong, but bankers have also pitched for a US listing, according to the people.
Wanda’s interest in property, sports and entertainment – accounting for more than US$13 billion of its deals in the past five years – ran into official opposition last year when Beijing labelled overseas deals in those areas “irrational”.
In addition to sports, its holdings also include the cinema chain AMC Entertainment Holdings and film studio Legendary Entertainment.
Wanda is seeking a chief financial officer for the sports business to lead the fundraising efforts, said another of the people.
Property forms the basis of the Wanda empire - its mixed use Wanda Plaza developments are common across China – but this too has put pressure on Wang’s business.
Last year, Chinese regulators told banks to stop providing funding for several of its overseas acquisitions as Beijing looks to curb the conglomerate’s offshore buying spree.
Soon after, Wanda sold a portfolio of hotels and tourism assets, including 13 theme parks, for $9 billion to Guangzhou R&F Properties and Sunac China.
● In a separate development, Wanda Film Holding, the Dalian Wanda subsidiary that operates the largest cinema chain in China, revealed it has plans for a substantial assets restructuring proposal, Wanda Film said in a filing on the Shenzhen Stock Exchange on Thursday.
Wanda Film’s shares were suspended from trading on July 4 when the company announced it planned to acquire some film-related assets.
The company will hold an investor presentation on January 8 to announce its planned overhaul which will involve substantial restructuring and taking 100 per cent ownership of Wanda Media through a share issue. It had previously hopes to announce the revamp in September, but said then it needed more time to iron out the details.
Wanda Film, re-branded from Wanda Cinema Line earlier last year, operates the largest cinema chain in China. It owned 490 cinemas and 4,340 film screens as of November, 2017, according to a business update released by the company last month.
Additional reporting by Li Tao