Wanda Cinema plans to inject the overall market value of Wanda Films and Legendary Pictures into Wanda Films or over 150 billion yuan

On the evening of April 21, Wanda Cinema Line issued an announcement stating that it would continue to issue a suspension and reorganization announcement. The targets the company plans to issue shares to purchase mainly include Wanda Film and Television Media Co., Ltd. and Legendary Pictures of the United States.

On the evening of April 21, Wanda Cinema Line issued an announcement stating that it would continue to issue a suspension and reorganization announcement. The targets the company plans to issue shares to purchase mainly include Wanda Film and Television Media Co., Ltd. and Legendary Pictures of the United States. Due to relevant regulations, Wanda Cinema Line plans to continue to suspend trading.

According to the operating briefing disclosed by Wanda Cinema on the evening of March 7, the company's cumulative box office revenue (including overseas) from January to February was 1.581 billion yuan, a year-on-year increase of 69.6%. As of February 29, 2016, the company has 300 opened theaters and 2617 screens.

Wanda Theater has suspended trading since the market opened on February 24. The announcement on March 9 showed that the major event planned this time was the planned issuance of shares to purchase Wanda Group's film and television assets, involving major asset restructuring.

Previously, it was reported that Wanda Cinema's film and television assets are Wanda Films and Qingdao (real estate) Wanda Films, while the other acquisition target is Legendary Pictures.

In early January this year, Wanda Group announced that it would acquire Legendary Pictures for no more than US$3.5 billion in cash (approximately 23 billion yuan). This is the first investment M & A case in the domestic film and television industry in 2016, and it is also the largest M & A investment by a China company in a foreign country in film history.

At the signing ceremony for Wanda's acquisition of Legendary Pictures, Wang Jianlin revealed that Wanda's film and television industry will soon launch the capitalization of Wanda's film production and distribution industry, or IPO. "Legendary Pictures joining at this time undoubtedly adds extremely bright features to Wanda's wealth story. This year, two very famous blockbusters,"Warcraft" and "The Great Wall", will be released, which will directly increase the amount of capitalization and increase our income." Wang Jianlin said.

Wanda Films was founded in 2009 and began to invest in films in 2011."Intimate Enemy" directed by Xu Jinglei was the first film invested by Wanda Pictures. Since 2012, the pace of investment has been accelerated. In 2012, it invested in four works including "Palace Lock Agarwood" and "Police Story 2013". In 2014, it invested in five works including "Taking Tiger Mountain by Wisdom" and "Single Men and Women". In 2015, it invested in eight works including "Seeking the Dragon" directed by Wu 'ershan and "Charlotte Worries" by Kaixin Mahua.

During the Spring Festival this year, a "Wanda Pictures Financing Promotion Letter" was circulated in the investment circle. The financing recommendation letter shows that Wanda Pictures raised a total of 10 billion yuan in this round. The investors 'capital contribution method is to transfer Wanda Films' old shares and increase the capital of Wanda Qingdao. The private equity valuation of Wanda Films is expected to be 35 billion yuan.

Wanda Film and Television was established on July 8, 2009, and is mainly engaged in the production and distribution of animated films, feature films, TV variety shows, film distribution, and project investment; as of February 29, 2016, Wanda Film and Television's total assets were 166,215 million yuan and net assets were 108,663 million yuan. Qingdao Wanda Film and Television is a new company established on November 17, 2015. It is mainly engaged in national film distribution, film and television project investment and management, organization of cultural and artistic exchanges, film and television planning, etc. As of February 29, 2016, Qingdao Wanda Film and Television has total assets of 286,554 million yuan.

In addition, Wanda Pictures 'target compound annual growth rate of total revenue and net profit from 2016 to 2020 is more than 20%. According to the above-mentioned financing promotion letter, it is estimated that by 2018, the total revenue of Wanda Films and Legendary Pictures will exceed 8 billion yuan and the net profit will be 1.8 billion yuan. If Wanda Pictures does not achieve listing in 2016, investors can choose to withdraw, and Wanda Group will repurchase the shares held by investors at a simple interest rate of 15%.

In this 10 billion yuan fundraising, participants not only include Oceanwide Holdings, but also Baidu, Tencent, Hony Capital, Price Capital, etc. On March 5, Oceanwide Holdings announced that it plans to invest a total of 2.5 billion yuan in two entities of Wanda Pictures, Wanda Film and Television and Qingdao Wanda Film and Television, through two methods: transfer of old shareholders and capital increase. Oceanwide Holdings has promised to actively cooperate with Wanda Film and Television and Qingdao Wanda Film and Television in the listing work. It also agreed not to transfer relevant equity to any third party before the two target companies are listed.

On March 22, Oceanwide Holdings Co., Ltd. announced the progress of foreign investment, stating that the company had previously planned to acquire 6.61% equity of Wanda Film and Television for 1.058 billion yuan, and to increase its capital by 1.442 billion yuan to acquire 7.59% equity of Qingdao Wanda Film and Television. As of March 15, 2016, the company has completed the payment of all investment prices in accordance with the equity transfer agreement and capital increase agreement.

According to the announcement of Oceanwide Holdings, it can be calculated that the valuations of Wanda Film and Television and Qingdao Wanda Film and Television are 16.006 billion yuan and 18.999 billion yuan respectively. Based on this, the total valuation of Wanda Pictures is 35.005 billion yuan.

According to the purchase price of Wanda's acquisition of Legendary Pictures of 23 billion yuan, the market value of Wanda Cinema before the suspension was 94.296 billion yuan. Together with Wanda Pictures's 35.005 billion yuan, after Wanda Pictures and Legendary Pictures injected into Wanda Cinema, the market value of Wanda Cinema will exceed 150 billion yuan.

According to insiders of Wanda Group, Wang Jianlin also wanted to promote the independent listing of Wanda's film business. However, the A-share listing took a long time and there were a lot of uncertainties, so the fastest way is to integrate Wanda Pictures and the acquired Legendary Film Industry directly into the Wanda Theater Line, which is already listed on the A-share market. Once Wanda Pictures and Legendary Pictures were included in the Wanda Theater Line this time, the "curve saves the country" achieved Wang Jianlin's partial listing purpose of the film industry.

Editor: yvonne