China's Recon Group in Talks to Acquire Millennium Films (Report)
The Chinese conglomerate bought British soccer team Aston Villa from the former owner of the Cleveland Browns last year.
Chinese conglomerate Recon Group is in talks to acquire Avi Lerner's Millennium Films, producer of The Expendables franchise and genre flicks such as Olympus Has Fallen.
The purchase would be made through Recon's Shenzhen stock exchange-listed subsidiary Recon Wenyuan Cable Co., Bloomberg reported Tuesday, citing two unnamed sources. No potential price tag was reported.
Headed by Chinese businessman Tony Xia, Recon took over Wenyuan Cable — a manufacturer of wires and cables — last October and has sought to shift the company's focus to entertainment. Last May, the parent company, which owns businesses in industries ranging from infrastructure to healthcare, bought British soccer club Aston Villa from Randy Lerner, former owner of the Cleveland Browns, for an estimated $101 million.
Founded in 1996 by Avi Lerner and Trevor Short, Los Angeles-based Millennium Films has been courting potential Chinese buyers for the past year, sources in Beijing tell THR.
Several of the company's genre films have found big success at China's box office. Expendables 2, which was co-financed and distributed by Beijing's Le Vision Pictures, earned $57 million in China in 2012. Last year, Mechanic: Resurrection brought in $49 million there, while London Has Fallen pulled in $52 million.
Over the past few years, Chinese firms have been acquiring U.S. media companies with ever greater frequency. Other high-profile acquisitions include Dalian Wanda Group's purchase of Legendary Entertainment and Dick Clark Productions, for $3.5 billion and $1 billion, respectively. Last summer, Los Angeles-based Tang Media Partners, which is backed by Chinese investment, snapped up Stuart Ford's IM Global, while Alibaba Pictures Group took a stake in Steven Spielberg's Amblin Entertainment.
Wenyuan Cable has a market value of about $1.2 billion. The company's stock has been suspended from trading since Jan. 26 pending an acquisition in the film sector, according to regulatory filings.
Whether Wenyuan Cable, an untested firm new to entertainment, could close a sizable cross-border film acquisition in the current regulatory climate is an open question. Late last year, China's regulators began scrutinizing overseas media deals much more closely. The clampdown is part of a broad effort to curb capital flight, which is seen as contributing to the devaluation of the Chinese currency. Regulators also are concerned about publicly traded manufacturing firms using high-profile diversifications into entertainment — a trendy sector among Chinese investors — as a short-term strategy to boost stock prices.