Legendary Says It Has "No Interest" in Investment From Saudi Fund

Wang Jianlin China Brand Summit GETTY H 2016
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Chinese tycoon Wang Jianlin is said to be looking to sell a sizable stake in the Burbank-based film studio.

Legendary Entertainment, the U.S. movie studio owned by Chinese conglomerate Dalian Wanda Group, has no interest in an investment from Saudi Arabia’s sovereign wealth fund PIF.

"Legendary Management has no interest in conducting a transaction with PIF," the studio said Thursday.

The comment came after a Reuters report citing unnamed sources that said PIF, short for Public Investment Fund of Saudi Arabia, was considering making a major investment in Legendary to the tune of $500 million to $700 million. The fund was in talks to hire a financial adviser to assist with the bid, Reuters said.

The Saudi fund has not held formal discussions with Legendary about the prospective investment, sources close to the studio said. It wasn't clear though whether Wanda has held discussions with Saudi Arabia.

Since coming in to run Legendary at the end of 2017, CEO Josh Grode has focused on cleaning up its balance sheet. Sources said that the firm has about $1 billion in resources and is not currently looking for funding. One source said that if it needed an investment for parent company Wanda, Saudi Arabia would not be where it would look for the money.

Wanda, led by Chinese billionaire Wang Jianlin, purchased Legendary at the eyebrow-raising price of $3.5 billion in 2016. The Chinese firm once harbored ambitions of becoming a global leader in the entertainment sector, but has since shed international film and real estate assets under pressure from the Chinese government. 

Representatives for Wanda and PIF did not reply to requests for comment.  

Any investment offer could pose a dilemma for Wanda and Legendary after the high-profile killing of journalist Jamal Khashoggi last month. Khashoggi, a columnist for The Washington Post and a vocal critic of Saudi Arabia's Crown Prince Mohammed bin Salman, is widely believed to have been murdered by a Saudi hit squad while picking up documents in the country's Istanbul consulate on Oct. 2.

The Saudi regime has denied that the Crown Prince was involved in Khashoggi’s assassination, but much of the recent international reporting has suggested otherwise. The Saudi public prosecutor on Thursday unveiled charges against 11 people accused in the killing, recommending the death penalty for five of them.

The Saudis were recently viewed by Hollywood as a tantalizing new capital source, as the Crown Prince had sought to portray himself as a reform-minded leader bent on spreading billions around the globe to diversify his country's oil exports-based economy through investment. 

But in the wake of the Khashoggi killing, many in Hollywood have sought to put distance between themselves and the Crown Prince and his money. Hollywood talent agency Endeavor is currently working to unwind a prior $400 million investment from PIF because of the poor optics of a continued association with the Saudis. A wave of entertainment executives — including STX CEO Robert Simonds, Viacom's Bob Bakish and others — pulled out of Saudi Arabia's flagship investor conference last month.

Wanda has faced continued pressure from the Chinese government to trim debt and reduce overseas holdings. But for Legendary, there could be concerns over how a Saudi deal might affect the studio's ability to attract top talent for its projects, Reuters' sources said. 

Legendary's most recent releases include Pacific Rim Uprising and Dwayne Johnson's Skyscraper. The company is set to release two tentpoles in 2019: Pokemon: Detective Pikachu starring Ryan Reynolds and Godzilla: King of the Monsters.

Tatiana Siegel, Alex Ritman and Georg Szalai contributed to this report.