Dick Clark lat­est vic­tim of Bei­jing’s cap­i­tal con­trols

New Straits Times - - Busi­ness | World -

BEI­JING: A US$1 bil­lion (RM4.44 bil­lion) bid by China’s Wanda Group for the op­er­a­tor of the Golden Globe awards has been aborted, the United States firm’s par­ent has said, fol­low­ing re­ports that it was sunk by a Chi­nese clam­p­down on over­seas in­vest­ments. The ac­quis­i­tive Chi­nese prop­erty-to-en­ter­tain­ment group had an­nounced in Novem­ber it planned to buy Dick Clark Pro­duc­tions, the lat­est move into Hol­ly­wood by a com­pany from China.

But El­dridge In­dus­tries, the par­ent of Dick Clark Pro­duc­tions, said in a state­ment is­sued in the US on Fri­day the deal was ter­mi­nated “af­ter Wanda failed to hon­our its con­trac­tual obli­ga­tions”.

El­dridge In­dus­tries added that Dick Clark Pro­duc­tions was su­ing Wanda for funds it is con­trac­tu­ally owed upon “fail­ure to con­sum­mate the sale”.

Reached by phone yes­ter­day, a Wanda spokesman de­clined to com­ment.

Sources told Bloomberg News last week that Wanda had strug­gled to move the money for the ac­qui­si­tion out of China.

“It’s al­most im­pos­si­ble to use the yuan to in­vest in over­seas projects,” Zhang Yichen, chief ex­ec­u­tive and chair­man of Citic Cap­i­tal Hold­ings, told Bloomberg News.

“To say that cap­i­tal con­trols don’t have any im­pact — it’s a lie. As a re­sult, yuan funds can only give up, and not in­vest (out­side China).”

Wanda, headed by one of China’s rich­est men, Wang Jian­lin, is a com­mer­cial prop­erty devel­oper that has diver­si­fied re­cently into en­ter­tain­ment and sports, partly as a buf­fer against Chi­nese realestate volatil­ity.

Wanda bought AMC En­ter­tain­ment Hold­ings — owner of USbased cin­ema chain AMC The­atres — for $2.6 bil­lion in 2012 and last year ac­quired Leg­endary En­ter­tain­ment, mak­ers of the re­cent “Bat­man” tril­ogy and “Juras­sic World“, for US$3.5 bil­lion.

The Dick Clark Pro­duc­tions deal would have marked its en­try into tele­vi­sion pro­duc­tion.

Dick Clark Pro­duc­tions’ epony­mous founder made his name pre­sent­ing “Amer­i­can Band­stand” for more than 30 years. The com­pany also owns the tele­vi­sion rights to events rang­ing from Miss Amer­ica to the New Year count­down in New York’s Times Square.

Chi­nese firms went on a multi­bil­lion-dol­lar shop­ping spree last year, cul­mi­nat­ing in state-owned ChemChina’s pend­ing US$43 bil­lion bid for Swiss seed gi­ant Syn­genta.

The ac­qui­si­tions stoked Chi­nese of­fi­cial con­cern over cap­i­tal flight, reck­less in­vest­ments, slow­ing do­mes­tic eco­nomic growth and a weak­en­ing yuan cur­rency.

The gov­ern­ment be­gan last year to roll out new re­stric­tions to curb the out­flow of money into “ir­ra­tional” in­vest­ments.

Com­merce Min­is­ter Zhong Shan on Satur­day kept up the crit­i­cism of over­seas in­vest­ments by Chi­nese “com­pa­nies with no strength or ex­pe­ri­ence”.

“Some com­pa­nies have al­ready paid the price,” said Zhong dur­ing a press con­fer­ence at the an­nual ses­sion of China’s rub­ber­stamp leg­is­la­ture.

Cen­tral bank gover­nor Zhou Xiaochuan last week blamed the for­eign in­vest­ment wave on “over­heated emo­tions”, say­ing the gov­ern­ment’s mea­sures have been “nec­es­sary and ef­fec­tive”.

Wang Jian­lin

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.