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China innovators

Aston Villa’s owner Tony Xia to take majority stake in Hollywood Millennium Films

The deal eyeing 51 per cent stake of the target would worth no more than US$100 million

PUBLISHED : Wednesday, 15 February, 2017, 8:14pm
UPDATED : Wednesday, 15 February, 2017, 11:27pm

Tony Xia, Chinese owner of the UK championship soccer club Aston Villa, is in talks to acquire a 51 per cent stake of a Hollywood movie studio for no more than US$100 million, a filing by the Shenzhen-listed company Xia controls said on Wednesday afternoon.

An executive of Xia’s company confirmed with the South China Morning Post that the target of the acquisition is Los Angeles-based Millennium Films.

During an exclusive interview with the Post in October, Xia said he was marching into the movie industry, with plans to acquire stakes in three major movie companies in Hollywood, including one of the “big six”.

Wenyuan Cable Co. said in a filing that the company is to acquire s 51 per cent stake in a film studio from a US film production company, for no more than US$100 million, through Sure Lead Holdings, a subsidiary registered in Hong Kong.

While the completion of the deal is pending final negotiation for specific terms and approval by regulators, including China’s Ministry of Finance, and the foreign exchange watchdog the State Administration of Foreign Exchange, the filing said, noting Wenyuan Cable will resume trading from Thursday.

The company has been suspended from trading since January 26. The company has a market value of around US$1.2 billion.

Xia took control of Wenyuan Cable, a manufacturer of wires and cables in last October and has been working to shift the company’s focus to entertainment, he told the Post in the earlier interview.

Hollywood film makers are among the hottest targets chased by Chinese capital moguls in recent years. Should the deal complete, Xia would join a club of Chinese tycoons including Wang Jianlin, who has bought into the sector.

China’s property tycoon Wang Jianlin grabbed global headlines with the acquisition of Legendary Entertainment in a deal for US$3.5 billion in 2015, while private equity tycoon Guo Guangchang, who controls Fosun International, was reported to conduct investment worth US$2 billion into Studio 8 in 2014. In 2016, China’s e-commerce giant Alibaba purchased a minority shareholding in acclaimed director Steven Spielberg’s Hollywood studio Amblin Partners.

However, analysts said similar acquisitions were facing regulatory headwinds, from both China and the US.

“For the China side, moving money outside is getting harder as capital account control is tight for the sake to defend the currency rate and foreign exchange reserve pool,” said Shaun Rein, managing director of Shanghai-based China Market Research Group. “While for the US side, concerns are rising among government officials about the power of Chinese companies that are backed implicitly or tacitly by the Chinese government, particularly for those deals in the culture and entertainment sector.”

Founded in 1996 by Avi Lerner and Trevor Short, Los Angeles-based Millennium Films produced several genre films that have found success at China’s box office. Expendables 2, featuring Sylvester Stallone, and which was co-financed and distributed by Beijing’s Le Vision Pictures, earned US$57 million in China in 2012.

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