LeTV plans to acquire LeTV Pictures Huang Xiaoming and Sun Honglei as shareholders for 9.8 billion yuan

After the inclusion of LeE.com, LeE.com's equity has also changed. LeE.com CEO Jia Yueting's shareholding will drop from 36.79%. Zhang Yimou, Sun Honglei, Sun Li Studio, Huang Xiaoming, Li Xiaolu and Guo Jingming have all become LeE.com shareholders.

The news that LeTV Pictures has injected into LeTV has been finalized. LeTV announced on the evening of May 6 that it plans to issue 165 million shares to LeTV Pictures shareholders at a price of 41.37 yuan/share and pay 2.979 billion yuan in cash, for a total price of 9.8 billion yuan, to acquire 100% equity of LeTV Pictures. Before this transaction, the company did not hold equity in LeTV Pictures; after the completion of this transaction, LeTV Pictures became a wholly-owned subsidiary of LeTV.

Before this transaction, LeEco Pictures had a total of 44 shareholders, including LeEco Holdings, Le 'an Pictures, Shanghai Chunhua Jingli, LeEco Pictures CEO Zhang Zhao, Shenzhen LeEco Xingen, LeEco Holdings co-founder and vice chairman Liu Hong, etc. After the inclusion of LeE.com, LeE.com's equity has also changed. LeE.com CEO Jia Yueting's shareholding will drop from 36.79%. Zhang Yimou, Sun Honglei, Sun Li Studio, Huang Xiaoming, Li Xiaolu and Guo Jingming have all become LeE.com shareholders.

According to the negotiation results of the parties to the transaction, the consideration payment for Le Pictures '100% equity interest will be made by a combination of shares and cash, and the total share and cash payment ratios will be 69.60% and 30.40% respectively.

In addition, according to the acquisition plan, the company plans to raise funds of no more than 5 billion yuan. In addition to part of it being used to pay for the cash consideration for the acquisition of LeTV Pictures, the rest will be used to strengthen the film's content self-control and copyright reserve capabilities, and further possess the entire IP industry. Chain operation capabilities enhance the core competitiveness of the LeTV ecosystem in the content field.

After injecting into Le.com, LeTV Pictures promised that the net profit attributable to shareholders of the parent company from 2016 to 2018 after deducting non-recurring gains and losses will not be less than 520 million yuan, 730 million yuan and 1.04 billion yuan. Based on the valuation of Le Pictures of 9.8 billion yuan and the promised profit of 520 million yuan in 2016, the corresponding P/E ratio is only 18.85, which is far lower than the PE value of the industry and the average PE (50) level of the media industry.

The company said that after the transaction was completed, LeE.com's major shareholders fulfilled the asset injection commitments made that year as scheduled. LeTV Pictures will carry out a comprehensive and in-depth "ecological reversal" with listed companies on their respective advantages:

1. At the level of user value, the injection of LeTV Pictures will further strengthen LeTV's leading edge on the content side. Both parties will also be fully integrated on platforms and terminals. And at all levels of the application to provide users with a full range of services and new experiences.

2. In terms of industrial value, the box office of China's films has continued to rise in recent years, and has become the world's second largest box office market after the United States. However, the domestic film industry is far from international film giants such as Hollywood in terms of industrialization. Based on this, after LeTV Pictures is injected into LeTV, it will comprehensively upgrade the "Internet Ecosystem + Film and Television" model and accelerate its exploration of the scale and globalization of domestic films.

3. From the perspective of company value, this acquisition will eliminate the problems of related transactions and horizontal competition among listed companies, and its overall profitability and risk resilience are expected to be greatly improved.

After the acquisition is completed, the listed company will own three core content assets: LeTV Video, Huaer Film and Television and LeTV Pictures. Among them, LeTV Video has the most complete legal film and television copyright library in the country, and is accelerating its efforts in the fields of self-production, variety show, music, animation and other fields to achieve high-quality and differentiated content; Huaer Films is a traditional TV drama production company with Zheng Xiaolong and other famous directors, whose famous works include TV series such as "Desire","Story of the Editorial Department","Golden Wedding","Beijingers in New York","Legend of Zhen Huan", and "Legend of Mi Yue". The injection of LeTV Pictures means that LeTV will form a complete industrial chain of movies, TV series, online self-produced dramas, and variety shows. Core resources such as scripts, directors, screenwriters, and actors can be fully shared and closely coordinated between their respective businesses.

The following is the full text of the letter from LeTV Pictures CEO Zhang Zhao:

Intoxicating movies, global pursuit of dreams

-a letter from LeTV Pictures CEO Zhang Zhao to all employees

LeTV Pictures students:

I believe that everyone has already known that LeTV Pictures is about to inject news into LeTV. As the pioneers of the "Internet + Film and Television" era, we have gained capital recognition with five years of hard work. Five years later, we were once again lucky: we integrated into the LeEco ecosystem by injecting it into LeE.com.

The prosperity of human civilization is accompanied by the profound imprint of images. From the "language era" and "paper era" to the "screen era" where things are connected today, mankind has experienced waves of cultural renaissance again and again.

Movies are a product of culture and also feed back to human civilization: Lucas created the great "Star Wars" in the United States, which deeply influenced generations of Americans and aroused human enthusiasm for science fiction culture and infinite yearning for outer space exploration;"Ah! Captain, my captain!" Robin? Williams 'performance in "Dead Poets Society" shocked the souls of generations of young people, making them dare to break through their cages, resist authority, and break the shackles of thought.

Looking back on the past five years, we have been thinking about one question: Who are we serving? Users are our core.

LeTV Pictures 'mission has never been to achieve high box office. We are thinking more about how to provide services to users and create value. These words sound a bit sour and difficult to do, but we still took "Tiny Times" into the lives of ordinary Foxconn workers; arranged for our grandfathers and grandchildren to watch "Return" in a different place; and held a music praise competition for "The Brothers Sleeping on My Upper Bunk"-every tear and every smiling face shone with a glimmer of culture.

We warm users and influence society. At all times, we must adhere to the cultural mission of a cultural and creative worker.

Dreams cannot be called dreams if they cannot illuminate others. Today, we are going to talk about the extraordinary event of LeTV Pictures 'injection into LeTV. We have begun to upgrade from an Internet film and television company to an ecological film and television company. With the power of technology, the Internet and ecology, we will further move from a resource-centered film and television manufacturing industry to a user-centered film and television service industry, thereby completing our greater cultural mission.

By injecting LeE.com, we will further open up five major links: China and the world,"shadow" and "video", online and offline, IP and users, content and ecology. Through LeEco's globalization strategy, LeEco Pictures will begin to carry out in-depth cooperation with top film and television companies around the world to create better content and services, so that China films can go global and affect more users;

Through the integration of LeE.com and LeEco Pictures, we will seamlessly connect films, homemade dramas, hardware, applications, services and other departments, allowing IP value to serve users in full text, full process, full terminal, full life, and full ecology; The integrated online and offline resources will be integrated through ecological anti-integration, better relying on terminals and scenarios to provide services to users; The content ecosystem will serve as an ecological member of the LeEco ecosystem that bears cultural values, allowing content to exert greater cultural value.

Of course, by injecting it into LeTV, many of you will become wealthy among your contemporaries in the industry. I promise everyone in the film industry that with the introduction of LeTV, you will soon become sharers of the LeTV ecosystem. "Ecology" is "a place where life is endless and great." I also hope that every colleague in LeTV Pictures can uphold the lion and wolf culture and become LeTV's best ecological talents.

Five years ago, I mentioned turning Le Pictures into a film and television company in the Internet era. At that time, many people said that we were an idiotic dream. Nowadays, every film and television company is inseparable from the Internet. We were delighted to see our dreams come true step by step, which also strengthened our belief that every dream of LeTV Pictures can be realized.

LeTV Pictures is too new. We know that all fears come from ignorance. We should not be afraid of others 'ridicule and hostile eyes, but must believe in our beliefs in the cause. Because we are all dream chasers. This time, let us pursue our dreams around the world with our cultural mission.

LeTV Pictures CEO Zhang Zhao

May 6, 2016

Editor: yvonne