Alibaba, Ten­cent join hands for Bona Film buy­out

China Daily (Canada) - - LIFE - By MENGJING mengjing@chi­na­di­aly.com.cn

In­ter­net gi­ants Alibaba Group Hold­ing Ltd and Ten­cent Hold­ings Ltd are join­ing the group bid­ding to take Chi­nese film stu­dio and dis­trib­u­tor Bona Film Group Ltd pri­vate af­ter it delists from the Nasdaq stock ex­change.

Alibaba Pic­tures Group Ltd, the film af­fil­i­ate of Alibaba Group, said on Tues­day that it would join other en­ti­ties to buy out Bona, which re­ceived a pri­va­ti­za­tion pro­posal in June. Bona, backed by bil­lion­aire Guo Guangchang, is a lead­ing pro­ducer and dis­trib­u­tor of films in China.

The pro­posed deal val­ues Bona at about $1 bil­lion. The Hong Kong-listed Alibaba Pic­tures said it would spend about $86 mil­lion for a 10 per­cent stake in Bona, while Ten­cent has de­clined re­quests to share terms. The deal is ex­pected to close dur­ing the sec­ond quar­ter of next year.

In June, a group in­clud­ing a ve­hi­cle named Uranus Con­nec­tion and Chi­nese in­vestor Xie Zhan­shan of­fered to buy Bona’s Amer­i­can de­posi­tary re­ceipts at $13.70 each.

Af­ter a string of in­vest­ment into film stu­dios and tick­et­ing soft­ware and other film-re­lated busi­nesses, an­a­lysts said the Bona deal marked the cash-rich In­ter­net gi­ant’s re­newed push into China’s boom­ing film and tele­vi­sion in­dus­try.

Alibaba

Pic­tures

said

that Bona is one of the lead­ing play­ers in China’s film making in­dus­try and it has achieved great per­for­mance not only in China but also in the global mar­ket.

“By team­ing up with Bona, we­hope to build up an ecosys­tem that can cover the en­tire in­dus­trial chain of movie and tele­vi­sion sec­tor,” the com­pany said in a state­ment.

Huang Guofeng, an an­a­lyst with the Beijing-based In­ter­net con­sul­tancy Analysys In­ter­na­tional, said that Alibaba Pic­tures, which was founded in 2014, has not had any ex­pe­ri­ence of making movies un­til now.

“By in­vest­ing in or forming al­liances with lead­ing film stu­dios, Alibaba Pic­tures is look­ing to im­prove its film­mak­ing skills and boost its sta­tus in the coun­try’s boom­ing movie in­dus­try in a rel­a­tively short time,” he said.

More im­por­tantly, Alibaba Pic­tures can in­te­grate its ex­ist­ing busi­ness of on­line tick­et­ing and crowdfunding movies with the tra­di­tional movie making in­dus­try, he said.

Yu Dong, chief ex­ec­u­tive of­fi­cer of Bona, ad­mit­ted that In­ter­net tech­nol­ogy is go­ing to change the movie in­dus­try. “China’s film stu­dios will be work­ing for the coun­try’s In­ter­net trio BAT (stands for Baidu, Alibaba and Ten­cent),” he said ear­lier.

Chen Shaofeng, vice-dean of the In­sti­tute for Cul­tural In­dus­tries at Pek­ing Univer­sity, said: “Last year, China’s box of­fice re­ceipts surged 34 per­cent to $4.8 bil­lion, while in theUnited States and Canada, it shrank by 5 per­cent to $10.4 bil­lion. Af­ter delist­ing from the Nasdaq, I think Bona wants to be relisted in China, where val­u­a­tions are much higher. It will be a good in­vest­ment for both In­ter­net com­pa­nies,” he said.

Sun Pishu, chair­man of In­spur Tech­nolo­gies Co Ltd

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