|
Post by The Ultimate Nullifier on Aug 30, 2017 22:09:50 GMT -6
variety.com/2017/biz/asia/chinas-recon-abandons-millennium-takeover-deal-1202543634/Chinese media investment firm Recon Holdings says that it has dropped its bid to acquire a controlling stake in Avi Lerner’s Millennium Films. Recon said that certain conditions had not been fulfilled by the Aug 31 deadline. The $100 million deal for 51% of Millennium was announced in February, by Recon a sprawling conglomerate that also owns the English soccer club Aston Villa. The deal announced covered Millennium’s library and gave Recon the option to buy out the outstanding 49% of Millennium shares at a later date. In a regulatory filing made on Thursday, Recon said that the ending of the deal had been a mutual decision and that they two may continue to seek a strategic cooperation. Despite the friendly words, there are strong reasons to suspect that the deal is yet another casualty of the tightening regulatory environment in China. Other deals to collapse under increasing Chinese scrutiny include Wanda’s bid to buy Dick Clark Productions and Xinke’s attempt to buy Voltage Entertainment. After several months of creeping regulatory action against “exuberant” and “irrational” dealmaking, the Chinese government this month spelled out clearly new controls for foreign investments by Chinese companies. Restricted categories include acquisitions in sectors including film, entertainment, sports clubs and hotels.
|
|
|
Post by The Ultimate Nullifier on Aug 31, 2017 15:11:43 GMT -6
www.hollywoodreporter.com/news/chinese-firm-abandons-100m-acquisition-avi-lerners-millennium-films-1034194Chinese Firm Abandons $100M Acquisition of Avi Lerner's Millennium Films The agreement had been viewed with skepticism from the start, given the Chinese company's lack of experience in entertainment and local regulators' crackdown on outbound dealmaking. The latest China-Hollywood dealmaking casualty has arrived: Avi Lerner's $100 million plan to sell majority control of Millennium Films to Beijing's Recon Group is officially dead. The indie maverick unveiled the agreement in February, saying he would offload 51 percent of the studio, known for The Expendables and Olympus Has Fallen franchises, to Recon subsidiary Wenyuan Cable Co. The deal included Millennium’s library and gave Recon the option to buy out the remaining shares of Millennium at a later date. But the Chinese firm reported to the Shenzhen stock exchange late Wednesday that the agreement had failed to meet an Aug. 31 deadline and was being aborted. The company cited difficulty satisfying local regulators' paperwork and disclosure deadlines. Wenyuan said it may instead seek "strategic collaboration" with Millennium. Founded in 1996 by Avi Lerner and Trevor Short, Los Angeles-based Millennium was understood to have courted potential Chinese buyers for over a year. The Recon deal was met with skepticism from the start, however, as Chinese regulators had begun a far-reaching crackdown on overseas investments by local firms several months prior. Although contracts were said to have been signed, many industry insiders in China doubted whether the plan could clear regulatory hurdles, which were then becoming more daunting by the week. Wenyuan Cable's dearth of experience in the entertainment sector wasn't expected to help either. The company's principle business activity is described as the manufacture of industrial wires and cables. Recon chairman Tony Xia, a Chinese businessman who had little international profile prior to his surprise takeover of British soccer club Aston Villa in 2016, said he planned to remake the company into an entertainment concern. The Recon parent company is a conglomerate with businesses in healthcare, infrastructure and agriculture. Regulators had grown suspicious of cross-sector transactions in the over-heated entertainment and sports industries though. In a similar head-scratcher late last year, an obscure Chinese industrial metals company announced, and later called off, a $350 million plan to buy Voltage Pictures, the Los Angeles-based production company behind Kathryn Bigelow's best-picture Oscar winner The Hurt Locker. Since then, Beijing's clampdown on outbound dealmaking in key sectors has only increased. After months of indirect market signaling and encroaching curbs on investments described as "irrational," China's State Council laid out new rules on international activity earlier this month, labeling the film, entertainment, sports and tourism sectors as officially "restricted."
|
|
|
Post by The Ultimate Nullifier on Aug 31, 2017 15:13:53 GMT -6
deadline.com/2017/08/millennium-film-deal-china-recon-dead-avi-lerner-1202158977/Millennium Films’ Deal With China’s Recon Now “Dead”, Says Avi Lerner The deal between China’s Recon Holding, which had reached an agreement to acquire a majority stake in Millennium Films in February, is now over, according to the head of the Los Angeles-based production company. The deal, heralded earlier this year by Tony Xia and his Beijing-based Recon (which is part of the Recon Group that owns England’s Aston Villa Football Club) was for the Chinese company to take a 51% stake initially, then acquire the rest later. Word came overnight that the deal was off. But then Xia took to Twitter to say it wasn’t and reports in the Financial Times suggested it might be re-financed offshore, and it wasn’t clear what was going on. Recon, in a regulatory filing in China, then said the acquisition deal was over. According to Millennium co-founder and chairman Avi Lerner, the deal is dead. “They paid us $20 million and the deal is now dead. As far as we know, it’s dead. The deal was for a little over $200 million for 100% of the company. They gave us $20 million on the come and they were supposed to pay us and they gave us many reasons why they couldn’t. It was this, it was that. It’s very simple. It’s dead. There is no secret deal. I will find another buyer or continue as we are.” The company is currently looking to recast two films, Hellboy and The Detail, after public and controversial falling-outs with their talent — one over “whitewashing” and actor Ed Skrein and the other with Keanu Reeves over a debate of what the word “commitment” means. There has been a decided turn in investment out of China, with the government clamping down on entertainment deals and really any that include an outflow of capital outside Middle Kingdom banks. A Chinese investor — Dalian Wanda Corp. — also stepped off the $1 billion acquisition of Dick Clark Productions. And in that deal, similar to the Millennium situation, they put up $25M to open negotiations and then when the deal collapsed, they paid out another $25M. In recent months and definitely after Donald Trump entered the White House, China has tightened the reins of some of Hollywood’s biggest players who had been investing in companies and film production. HuaHua (as expected) missed its promised payment to Viacom; Wanda will no longer put financing into Sony films, but will still lend support in China); and Legendary is a big question as they have no money coming in beyond what is in U.S. banks right now. The latest hiccup with Millennium is not all that surprising, and each deal with the Chinese right now in Hollywood is being met with a jaundiced eye. Stay tuned …
|
|
|
Post by The Ultimate Nullifier on Sept 1, 2017 9:20:24 GMT -6
variety.com/2017/biz/asia/millennium-takeover-deal-still-on-says-recon-boss-1202544756/Millennium Takeover Deal Still On, Says Recon Boss The Chinese acquisition of Avi Lerner’s Millennium Films is still on course, says the boss of Recon Group, Tony Xia. His denial comes only a day after his publicly listed Recon made a regulatory filing to the Shenzhen Stock Exchange announcing that the deal had exceeded time limits and was being halted. Xia took to Twitter — which is banned in China — to tag an earlier tweet announcing that Recon had dropped the Millennium deal. “Its not accurate. We changed another entity not pub listed 2continue the deal as the new Chinese policy of Film Industry restriction,” he said on his own Twitter account. The deal was originally announced in February this year. It saw Recon agreeing to pay $100 million for a 51% stake in Millennium, a mid-sized Hollywood-based independent production and sales company that specializes in genre fare. Xia’s mention of film industry restrictions is a reference to the Chinese central government policy of discouraging overseas acquisitions by heavily borrowed companies. The government has spent several months restricting such deals — characterized as “exuberant” and “irrational” — through capital controls and behind the scenes directives to the finance and banking industries. Last month in a formal policy document it spelled out the restrictions on overseas deals in film, entertainment, hotels and property sectors. Xia and Recon control a maze of publicly listed and private companies stretching from media to foods and football. Xia owns the Aston Villa soccer club that play in the English Premier League. His tweet appears to imply that instead of using the Shenzhen-listed Recon Group, he would get around government restrictions by using a less visible private firm within his corporate empire.
|
|