Chinese magnate revamps Hollywood deal amid scrutiny

A Chinese magnate, known for the purchase of English soccer club Aston Villa, has revised a plan to buy the majority of a Hollywood studio for $ 100 million due to increased government scrutiny over outbound deals in the entertainment sector.

Tony Xia Jiantong said in a tweet on Thursday he would no longer conduct the acquisition via his listed firm Recon Wenyuan Cable Co, but through a separate non- listed entity due to a “new Chinese policy of film industry restrictions.”

The government has been tightening regulations following big- money deals overseas, especially in areas such as film, sports and real estate, due to concern about high levels of debt.

It has also restricted the export of capital to rein in investment abroad, particularly in sectors unrelated to a firm’s core business, in the hope of stemming depreciation of the yuan.

In February, Recon Wenyuan said it planned to spend up to $ 100 million to buy 51 percent of Millennium Film, whose productions include The Expendables.

On Thursday, it said interested parties would not pursue the deal as it could not be completed before a previously agreed deadline of August 31.

Later Thursday, Xia retweeted a post stating the deal had been dropped, and attached a comment saying the post was not accurate and that another entity would “continue the deal.”

Xia is not the first magnate to cut a listed firm from a deal.

Gao Jisheng’s Lander Sports Development Co pulled out of a deal for English soccer club Southampton in April, before completing it independently earlier this month.