Korea's CJ-CVG Inherits Legal Woes From Acquisition
The exhibitor's stake in troubled Megastar is fraught with potential legal troubles.
Korea’s top cinema operator looks set to inherit recent acquisition Megastar’s ongoing legal problems after picking up a 92 percent share in Vietnam’s largest cinema chain, an official at the Competition Administration Department said in a report on the official Vietnam website.
“CJ-CVG recently announced it would pay $73.6 million for the stake in MegaStar, Vietnam’s leading film distributor, which has total assets of $38 million and rakes in 60 percent of box office revenues in the country,” the site added.
Last year, Megastar was sued by six companies, including the Galaxy cinema chain, which claimed it abused its position by imposing minimum prices and other conditions, according to the report.A number of Vietnamese and trade publications said the Korean company is to buy a 92 percent stake in Envoy Media Partners, which owns 80 percent of Megastar.
The remaining 20 percent is owned by Vietnamese publisher Phuong Nam Corp. CJ-CVG, part of Korea’s diversified CJ conglomerate, reportedly has a third of Korea’s cinema market and operations in China, Vietnam and India. Its website makes no mention of the recent Vietnamese purchase.