China's Wanda Scales Back Cinema IPO

2012-23 REP Wang Jianlin H

Wang suggests decentralizing film approvals.

The country's biggest theater chain, run by China's richest man Wang Jianlin, is looking to raise $210 million

China's biggest cinema chain, Wanda Cinema Line, a subsidiary of Dalian Wanda Group, has scaled back its stock market listing plan, now seeking to raise $210 million (1.28 billion yuan) through its initial public offering.

The company had originally planned to raise $325 million from the offering, according to a prospectus published last year. While no reason for the smaller target was given, the figure was probably scaled back because of a tightening on IPO pricing by the China Securities Regulatory Commission regulator, which is managing stock market listings.

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The company will issue 60 million shares, amounting to around 10.71 percent of the company, at $3.44 per share, the company said in a Shenzhen stock exchange filing.

Dalian Wanda Group, headed by Chinese tycoon Wang Jianlin, the country's richest man, is a giant property company. In 2012, the company bought North America's second-biggest theater chain, AMC Entertainment, for $2.6 billion.

Last month, Wang said the company had held talks to acquire a stake, preferably a controlling stake, in Lionsgate, and it launched a major theme park in Wuhan, which will compete with Disney.

The IPI approval was announced by the China Securities Regulatory Commission in December. Originally the IPO was looking to raise up to $325.6 million.

According to the filing, at the end of June, Wanda had 150 cinemas in more than 80 cities and 1,315 screens. The company is involved in cinema constructions, film distribution and screening and related business such as advertising.

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Wanda has been the biggest theater owner in China since 2009 in terms of box office, market share and audience numbers. In 2011, Wanda's total box office was $290 million, around 13.61 percent of the whole year's box office, with audiences of 40.86 million. In 2012, box office was $400 million, or 14.39 percent of the whole year's box office and audiences of 58.41 million.

In 2013, box office was $510 million, or 14.52 percent of the total, while in the period from January to June, box office reached $320 million or 14.46 percent of box office in the six-month period.

The lead underwriter for Wednesday's IPO is Bank Of China International (China), and the group has said Wanda Cinema has said it will use the funds to open some 50 new cinemas.

A previous effort in July to file an IPO on the Shenzhen stock exchange was suspended because of insufficient documents.

In August the group said it was spending $1.2 billion to develop its Hollywood presence after it won a bid for a plot of land at 9900 Wilshire Boulevard, Beverly Hills, for the HQ of its U.S. entertainment business.

Wanda Cinema is 68 percent owned by Wanda Investment, in which Wang owns 98 percent.

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