- Great Wall Movie and Television (002071.SZ) plans to acquire stakes in two companies for a total of RMB 1.89 billion, according to Securities Times.
- Shares in Great Wall Movie and Television will continue to be halted from trading.
Why It Matters:
- Great Wall Movie and Television will pay RMB 1.35 billion to acquire Shouying Shidai and RMB 545 million to acquire Dena Film. The company will pay around RMB 270 million cash in each deal and finance the remaining amount through issuing non-public shares at RMB 12.3 per share. The company will also raise a further RMB 563 million through issuing extra stock.
- Shouying Shidai is a filmmaking company which was founded by the famous director Gu Changwei. Dena Film operates cinema chains, owning 56 screens and 7,224 seats.
- In order to protect investors’ interests, Shouying Shidai has promised a RMB 90 million net profit for 2017 and a RMB 125 million net profit for 2018, and Dena Film has promised a RMB 38 million net profit and a RMB 50 million net profit in 2017 and 2018 respectively.