Dalian Wanda Scales Back AMC Investment

Joe Pugliese
Dalian Wanda chairman Wang Jianlin

The company, controlled by billionaire Wang Jianlin, was incentivized to scale down the AMC investment as Chinese regulators have encouraged cutting back on foreign holdings.

AMC Entertainment on Friday said its top investor, Dalian Wanda Group of China, trimmed its exposure to the giant chain of movie theaters while private equity firm Silver Lake made an investment.

Silver Lake's stake comes by way of $600 million in convertible notes at 2.95 percent interest convertible into AMC Class A stock at $20.50. AMC shares traded at $20 on Friday. Later, Silver Lake will appoint managing director Lee Wittlinger to AMC's board.

AMC said it will purchase about 24 million Class B shares from Dalian Wanda at $17.50 apiece, a price that represents a 13 percent discount. When the transaction is complete, Dalian Wanda will own about 38 percent of AMC, down from 60 percent.

Dalian Wanda, controlled by Chinese billionaire Wang Jianlin, was incentivized to scale down the AMC investment as Chinese regulators have encouraged companies there to cut back on their foreign holdings.

Dalian Wanda took a majority stake in AMC in 2012 for $2.6 billion, which Reuters said was then the largest overseas acquisition by a privately held Chinese company.

AMC also said Friday it will issue a special dividend of $1.55 per share, though not to Dalian Wanda on the shares it is selling to AMC.

Silver Lake has about $42.5 billion in investments in companies like Alibaba Group, Endeavor, GoDaddy and Cast & Crew.

"We are very excited to welcome a new highly sophisticated investor with a great track record of success,. Silver Lake believes in the inherent value of AMC now, and in the likelihood of AMC’s success going forward," said AMC CEO Adam Aron. "We are also truly pleased that Wanda is continuing with its longstanding commitment to AMC," he added.