Wanda Cinema's 37.2 billion yuan holding 100% equity of Wanda Film and Television does not constitute a backdoor listing

According to the announcement, the estimated value of 100% equity of Wanda Film and Television is about 37.5 billion yuan, and the estimated value-added rate is about 171.46%. The parties negotiated and temporarily determined the transaction price of the underlying asset to be 37.204 billion yuan.

On the evening of May 12, Wanda Cinema announced that the company plans to issue approximately 497 million shares to 33 counterparties including Wanda Investment at a price of no less than 74.84 yuan/share to purchase its 100% stake in Wanda Film and Television. According to the announcement, the estimated value of 100% equity of Wanda Film and Television is about 37.5 billion yuan, and the estimated value-added rate is about 171.46%. The parties negotiated and temporarily determined the transaction price of the underlying asset to be 37.204 billion yuan. After the transaction is completed, Wanda Cinema will directly hold 100% equity of Wanda Films.

At the same time, Wanda Cinema Line plans to adopt an inquiry and issuance method to raise matching funds of no more than 8 billion yuan for non-public issuance of shares from no more than 10 qualified specific objects, which will be used for theater construction projects and supplementary working capital after deducting issuance expenses. Based on the issuance base price of 74.84 yuan/share, the total number of issued shares does not exceed 107 million shares.

Based on the provisionally determined transaction price of the underlying assets, the upper limit of the total amount of matching funds raised and the reserve price of the matching funds raised, the total share capital of Wanda Cinema will increase to a maximum of 1.778 billion shares after the issuance of shares to purchase assets and the raising of matching funds is completed.

The underlying assets purchased by this share issue are 100% equity of Wanda Films. Wanda Film and Television was established in 2009 with a registered capital of 2.325 billion yuan. Its original business is domestic film production and distribution. The largest shareholder is Beijing Wanda Investment Co., Ltd., holding 38.71%.

Since its establishment, Wanda Film and Television's representative works include "The Quest for the Dragon","Detective Chinatown", and "Get lost! Tumor King "," Beijing Love Story "," Master of Hypnosis "," Police Story 2013 "," Hot Pot Hero "," Charlotte Worries "," Pancake Man ", etc. In 2015, Wanda Film and Television invested a total of 6.15 billion yuan in box office, accounting for approximately 23% of the box office share of domestic films, ranking first among domestic private film production companies. At the same time, Wanda Film and Television has accumulated rich IP reserves such as copyrights, domain names, and trademarks through buyout, adaptation, and originality.

The announcement also stated that before the transaction, Wanda Film and Television acquired 100% equity of Qingdao Film Investment and Mutual Love Interactive with itself as the main body. After the integration, Wanda's film and television business expanded into domestic film production and distribution, overseas film production and online game distribution business. As of the announcement date of the plan, Qingdao Film Investment and Mutual Love Interactive have respectively become wholly-owned subsidiaries of Wanda Film and Television and have completed the industrial and commercial change procedures.

Judging from the financial statements, before integration, Wanda Film and Television achieved total operating revenue of 382 million yuan and 569 million yuan in 2014 and 2015 respectively; total profits were 61.1623 million yuan and 141 million yuan; and net profits were 61.1623 million yuan and 130 million yuan respectively.

Wanda Cinema said that in recent years, on the basis of continuing to independently invest in building cinemas, the company has formulated a strategy to achieve rapid development through the acquisition of other high-quality cinema resources. By acquiring Wanda Film and Television, Wanda Cinema will realize the development of the entire industry chain of the film industry and will give full play to the synergy between various links within the film sector.

At the same time, through Wanda Films 'subsidiary Legend Pictures, Wanda Cinema can give full play to the synergy effect of domestic and foreign film investment and distribution. It can not only participate in the investment and production opportunities of Legend Pictures' future films, but also serve as an entry point for Wanda Films 'overall overseas business. Open up other business opportunities.

In addition, Wanda Film and Television's subsidiary Mutual Love interactively manages the distribution and operation of web games and mobile games. Through this reorganization, in addition to the coordination between various links within the film sector, Wanda Cinema can also further leverage the synergy between film and television and games and other industries, and realize the company's development strategy through strong alliances.

According to the announcement, Wanda Cinema Line and Wanda Investment signed a "Profit Forecast Compensation Agreement". Wanda Investment promised that the cumulative net profit of Wanda Films for 2016, 2017, and 2018 will not be less than 5.098 billion yuan.

In addition, before this transaction, Wang Jianlin, the actual controller of Wanda Cinema, held 60.41% of the shares of Wanda Cinema through Wanda Investment and Wanda Culture Group. After issuing shares to purchase assets and raising matching funds, Wang Jianlin still holds 50.72% of the shares of Wanda Cinema Cinema are still the actual controller of the company. This transaction does not constitute a backdoor listing.

Editor: yvonne