Dick Clark latest victim of Beijing’s capital controls
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”.