Wanda on track


Wanda Group shelved a $5.6 bil­lion re­or­ga­ni­za­tion plan, but an­a­lysts say the com­pany is still on the right track to be an “as­set-light” busi­ness.

Wanda Group Co shelved a $5.6 bil­lion re­or­ga­ni­za­tion of its en­ter­tain­ment as­sets, but an­a­lysts on Tues­day said the com­pany is still on the right track of re­struc­tur­ing its busi­ness to be an “as­set­light” model.

Wanda Cinema Line Co said in a state­ment on Mon­day it had sus­pended a pre­vi­ously an­nounced ma­jor as­set re­struc­tur­ing, say­ing the plan was pre­ma­ture and that mar­ket con­di­tions had changed.

In May, Wanda Cinema Line said it would buy Legendary En­ter­tain­ment and Chi­nese film-mak­ing as­sets from the par­ent group for 37.2 bil­lion yuan ($5.6 bil­lion).

Ac­cord­ing to the lat­est state­ment, the deal would not be in the best in­ter­est of mi­nor­ity in­vestors. For in­stance, Legendary needs more time to op­er­ate in­de­pen­dently to prove its sta­ble prof­itabil­ity.

“Although the com­pany sus­pended re­struc­tur­ing at this stage … its strate­gic di­rec­tion of be­com­ing a ma­jor en­ter­tain­ment plat­form and a holis­tic en­ter­tain­ment com­pany will not change,” said the state­ment.

Wanda Cinema Line shares fell 1.17 per­cent to close at 69.97 yuan in Shen­zhen on Tues­day.

Mean­while, a Mon­day me­dia re­port from The Pa­per said that China’s in­ter­net gi­ants Baidu Inc and Ten­cent Hold­ings Ltd have bro­ken with the al­liance they formed with Wanda in 2014, which had the am­bi­tious goal of jointly build­ing up an e-com­merce com­pany that could do bat­tle with Alibaba Group Hold­ing Ltd.

The re­port cited anony­mous sources as say­ing that nei­ther of the two in­ter­net com­pa­nies wanted to keep in­vest­ing in a money pit af­ter the joint ven­ture burned a to­tal in­vest­ment of 5 bil­lion yuan.

Lu Zhen­wang, chief ex­ec­u­tive of­fi­cer of the Shang­haibased Wan­qing Con­sul­tancy, said it is ex­tremely dif­fi­cult for Wanda to pull this on­line-to-off­line busi­ness off as the com­mer­cial real es­tate ma­jor needed to in­te­grate all kinds of dif­fer­ent mer­chants into one sys­tem.

Grant Ji, ex­ec­u­tive di­rec­tor of cap­i­tal mar­kets for north­ern China at CBRE Group, a US com­mer­cial real es­tate com­pany, said Wanda was still on the right track of its strate­gic busi­ness re­struc­tur­ing de­spite the re­cent set­backs.

“It may take sev­eral years to im­ple­ment the busi­ness tran­si­tion and it is too early to say the re­struc­tur­ing has failed just be­cause of the ups and downs of sev­eral deals,” said Ji.

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