21st Century Fox to Sell Its Stake in China's Bona Film Group

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Investment group Fosun raises its stake as Bona CEO Yu Dong buys the Fox stake, saying the move would not affect ongoing co-productions, including "Bride Wars."

Chinese film studio and distributor Bona Film Group has announced a major shake-up of its ownership structure, with investment group Fosun saying it is upping its stake in Bona to 20.8 percent, while Bona’s founder and CEO, Yu Dong, is buying back 21st Century Fox's entire 19.3 percent holding in the company for $71.4 million.

The Chinese conglomerate Fosun, which recently said it was investing in former Warner Bros. executive Jeff Robinov’s new company, Studio 8, is buying a further 13.8 percent. It owned 7.5 percent of Bona prior to the transaction, Bona said in a statement.

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21st Century Fox bought its ownership interest in Bona in May 2012, and Bona said the sale would have no effect on the five film co-productions between Fox and Bona, including Bride Wars, which began principal photography in June of this year, or on the robust pipeline of projects.

“We're delighted to have completed this transaction on such positive terms and look ahead to our future joint efforts, as Bona remains focused on future plans for Hollywood and international expansion,” said Yu.

Jim Gianopulos, chairman and CEO of Twentieth Century Fox Film, said: “We remain committed to our current co-productions with Bona as well as to exploring future collaboration with them and others in the exciting and rapidly growing Chinese film market.”

Fosun, whose principal business operations include insurance, industrial operations, property development, media and entertainment, and investment and asset management, first invested in Bona last year.

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“This additional investment by Fosun will further contribute to Bona's efforts in achieving its ambitious strategic goals across all segments, and speaks to Fosun's commitment to the entertainment industry as a whole as well as its recognition of Bona as the industry leader in China with strong potential going forward,” said Yu.

Under the investment agreement, Fosun will acquire 4.166 million Bona ordinary shares from Yu at $11.80 per share, or $5.90 per American Depositary Share.

“The Chinese film market is proving to become increasingly important internationally, and we hope to seize this valuable opportunity to become one of the top players in the global market,” Yu said.

Guo Guangchang, chairman of Fosun, said the deal was “another strategic foothold for Fosun in the global movie and entertainment industry.”

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“Bona has a unique vertically integrated business model and an experienced and professional management team in the field. Our partnership will combine the resources of Fosun and Bona to capture attractive opportunities in the fast-growing domestic movie industry, as well as the opportunities that will emerge through the cooperation in the movie business between the United States and China,” said Guo.

After the deal, Yu and Fosun will own approximately 32.3 percent (including 2.7 percent from stock options) and 20.8 percent of the company, respectively. The transaction is expected to close in the next two weeks and is subject to customary closing conditions.