China’s Dalian Wanda Group is exploring a deal to cut its stake in US-based global movie theater operator AMC Entertainment Holdings, Reuters reports, citing sources familiar with the matter.
Wanda is considering a deal in which AMC would borrow hundreds of millions of dollars through a convertible bond, and then use that money to buy back some of Wanda’s 60 percent stake, according to the report.
Private equity firms, including Silver Lake Partners and Apollo Global Management, are said to be in talks with AMC about making the debt investment. They could obtain board representation at AMC as part of any deal.
Wanda, which is led by billionaire Wang Jianlin, aims to retain control after any deal, according to the Reuters sources.
Wanda’s reported plan comes as the property-to-entertainment conglomerate, like some other Chinese groups, has been under pressure from China’s regulators to reduce overseas holdings after embarking on a major acquisition spree in the US and Europe.
Wanda acquired a majority stake in AMC in 2012 for US$2.6 billion, in what was then the largest overseas acquisition by a privately held Chinese firm and Wanda’s first foray into the US and Canada.
Based in Leawood, Kansas, AMC has more than 1,000 movie theaters globally.
In 2017, Chinese regulators told banks to stop providing funding to companies such as Wanda, HNA Group and Anbang Insurance for overseas acquisitions, amid concerns over financial overstretching, the report noted.
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