Citing changes in market conditions and the interests of minority shareholders, Wanda Cinema Line, the publicly traded exhibition unit of Wang Jianlin’s Dalian Wanda Group, has shelved plans for a 37.2 billion yuan ($5.6 billion) reorganization of entertainment assets. That includes a previously announced plan for Shenzhen-listed Wanda Cinema to acquire Legendary Entertainment from the parent group which purchased Thomas Tull’s studio for $3.5B in January. According to local reports, Wanda Cinema said tonight in China that the parties involved believe market conditions are not mature enough to continue pushing forward at this time.
Because of Legendary’s volume, which includes activities in the U.S. and China, a decision has been made that the studio should finish internal integration first and run independently for a period of time. That would give it the opportunity to show earnings stability, with 2016 expected to be profitable. The door has been left open to return to the reorganization later down the road and the company is expected to clarify the current situation later this week.
Legendary had a major hit with Warcraft in China where it grossed $221M earlier this year. The studio’s relationship with owner Wanda has been seen as instrumental to the local success; total worldwide box office on the game adaptation is currently $433M. Upcoming releases include Kong: Skull Island and The Great Wall. Projects in development include Adam McKay’s Jennifer Lawrence-starrer Bad Blood and Nate Parker’s The Birth Of A Nation follow-up. With those in the pipeline, holding off on going public appears to make sense.
Other assets which were to be moved under the Wanda Cinema umbrella include services unit Qingdao Wanda Pictures, which is building the massive Qingdao Studios project. Wanda recently acquired leading Chineses movie portal Mtime for $350M, saying Wanda Cinema Line would oversee the deal.