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.
China Crackdown Hitting Hollywood: Where Do China Investments Stand?
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 …
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