(BN) Wanda Holds Talks to Acquire Lions Gate, MGM in Hollywood Push

Wanda Holds Talks to Acquire Lions Gate, MGM in Hollywood Push
2014-12-01 10:05:07.586 GMT


By Bloomberg News
Dec. 1 (Bloomberg) -- Dalian Wanda Group Co., which
controls the second-biggest U.S. cinema chain, is in talks to
acquire a stake in film studio Lions Gate Entertainment Corp.,
billionaire chairman Wang Jianlin said.
The Beijing-based company is interested in buying control
of Lions Gate, the studio behind the “Hunger Games” films,
although its owners have only been willing to sell a minority
stake, Wang said in an interview. Talks are at an early stage
and may not lead to a deal, he said. Wanda has also held
discussions about investing in Metro-Goldwyn-Mayer Inc., the
independent producer of James Bond films, Wang said.
Closely-held Wanda joins Alibaba Group Holding Ltd.,
China’s biggest e-commerce company, and billionaire Guo
Guangchang’s Fosun International Ltd. in seeking to invest in
the Hollywood film industry. Wang also said he wants to acquire
large theater networks in Europe as part of his ambition to
control 20 percent of the global cinema market by 2020.
“Many people come knock at my door, but Wanda is only
interested in the big players and we want control,” Wang said.
“China’s movie industry is booming at unprecedented speed.
Buying a well-known U.S. company will help our distribution
overseas.”
The 60-year-old Wang, who made his fortune developing
shopping malls and hotels in China, has a net worth of $15.1
billion, according to the Bloomberg Billionaires Index.

Culture Shift

Wanda said in August it plans to invest $1.2 billion to
develop a plot of land in Beverly Hills, California, and will
set up an office there to do deals in Hollywood. Wang held an
Oct. 8 meeting in Beijing with Lions Gate chairman Mark
Rachesky, the movie studio’s largest shareholder, according to a
news post on the Chinese company’s website. The release didn’t
say what the two men discussed.
Officials at Lions Gate and MGM didn’t immediately return
calls outside of regular business hours seeking comment.
MGM, which owns rights to “The Hobbit” film series, filed
for bankruptcy in 2010 after spurning a takeover bid from Lions
Gate and activist investor Carl Icahn. It emerged less than two
months later.
Wanda, which also runs department-stores, tourism
businesses and chain of movie theaters in China, acquired AMC
Entertainment in 2012 for $2.6 billion including debt to expand
into the U.S.
Wang’s quest to build a global movie empire comes as he
says China’s housing market has ended its period of rapid
growth, after expanding at an “unhealthy, crazy” rate over the
past few years. Property prices will remain “stable,” and the
housing market will grow at the same pace as the economy over
the next 10 to 15 years, he said.
“We are shifting our group’s focus toward culture,
entertainment and e-commerce,” Wang said. “China’s movie
industry is growing a lot faster than that of the U.S.”

Middle Class

Wanda would consider acquisitions of film studios larger
than Lions Gate if any come up for sale, according to Wang. It
is also in advanced talks to buy a Chinese Internet finance
company, he said without naming the target.
Fosun, the Shanghai-based company that invested $200
million in Jeff Robinov’s Studio 8 in June, has also held talks
to invest in Lions Gate, people with knowledge of the matter
said last month. Alibaba visited Hollywood last month to learn
about movie studios and look for partners that would provide
better entertainment products for China’s 200 million people in
the middle class, founder Jack Ma said at an Oct. 27 conference.
Wanda said last year it plans to invest 50 billion yuan
($8.1 billion) to build an entertainment park in Qingdao, a
coastal city in eastern China, that will include a movie museum
and 20 studios scheduled for completion in 2017.



For Related News and Information:
China Billionaire Buys L.A. Land for Foray Into Hollywood Films
Alibaba Said to Seek Hollywood Movie Deals in Race for Content
Dalian Wanda Commercial Said to Prepare $6 Billion Hong Kong IPO
Chinese Tycoon Guo Copying Buffett Rises From Bread to Club Med
Lenovo Heeds Jiang’s ‘Go Out’ Call in Second China M&A Wave
Top Stories:TOP<GO>

To contact Bloomberg News staff for this story:
Zijing Wu in Hong Kong at +852-2977-4819 or
zwu17@bloomberg.net;
Christine Hah in Beijing at +86-10-66497504 or
chah@bloomberg.net;
Stephen Engle in Beijing at +86-10-6649-7582 or
sengle1@bloomberg.net
To contact the editors responsible for this story:
Philip Lagerkranser at +852-2977-6626 or
lagerkranser@bloomberg.net
Ben Scent

>>> Leoni - Helvea Cuts to Hold from Buy, price target: €50

Helvea Cuts LEO.DE to Hold from Buy, price target: €50 
- citing lower earnings post company's cut tin its FY14 guidance
- Firm believes that a premium to historical average trading multiples is no longer justified given the stock’s recent re-rating as expectations in terms of growth and lower earnings are now fully priced in

(BI) GRANTHAM: 'US Fracking Is A Very Large Red Herring'

GRANTHAM: 'US Fracking Is A Very Large Red Herring'

2 Of America's Important Shale Basins Are Now In The Red

Jeremy Grantham is not a believer in the shale fracking boom.

Earlier this month, we highlighted Grantham's full quarterly letter to GMO clients, in which he said, among other things, that the US shale boom has been "a very large red herring."

So while some say the fracking boom has has helped keep oil prices low and aided the US on its path to energy independence, Grantham thinks it might have set us on a path to nowhere.

"Its development has been remarkable," Grantham writes.

"It will surely be seen in the future as a real testimonial to the sheer energy of American engineering at its best, employing rapid trials and errors – with all of the risk-taking that approach involves – that the rest of the world finds so hard to emulate. Similarly, it will always stand out as remarkable proof that, so late in the realization of the risks of climate change and environmental damage, the U.S. could expressly deregulate such a rapidly growing and potentially dangerous activity."

The overall thrust of Grantham's letter is that the world will soon be devoid of the resources it is going to need to sustain our current economic model, which over the last 150 or so years has been predicated on cheap energy, namely oil.

A concern Grantham has with fracking is that the boom hasn't been accompanied by any real concern as to the environmental damage it may be inflicting. But Grantham is also hugely skeptical on the potency of the shale boom because it doesn't address the problem of our need for cheap oil.

Grantham writes that, "[Fracking] has not prevented the underlying costs of traditional oil from continuing to rise rapidly or the cash flow available to oil-producing countries like Saudi Arabia, Iran, and especially Venezuela from getting squeezed from both ends (rising costs and falling prices)."

And as we saw last week, OPEC announced that it would not impose production cuts despite the sharp decline in oil prices seen over the last few months, and it seems unlikely that Grantham would be surprised by this.

Because if your national economy is chiefly predicated on exporting oil, you have made your bed and therefore must lie in it as oil prices drop.

But the US boom, which as Grantham notes has accounted for almost all of the increase in global oil production over the last several years, has been undertaken by companies, not countries.

And so with an eye towards profit, Grantham writes that these companies, "have drilled, as always, the best parts of the best fields first, and because the first two years of flow are basically all we get in fracking, we should have expected considerably better financial results by now. The aggregate financial results allow for the possibility that fracking costs have been underestimated by corporations and understated in the press."

And with a decline in oil prices set off by too much supply, it will be these companies that are forced to pare production, which will reduce supply, which will create — once again — expensive oil.

"The current fall in price does nothing to offset the squeeze on the total economy from rising costs," Grantham writes. "It merely transfers massive amounts of income from one subgroup (oil producers) to another (oil consumers), in a largely zero-sum game.


"Oil consumers tend to spend more and save less than oil companies so short-term impacts are favorable. But we should not be carried away with enthusiasm because the declining investment from the oil industry will lower future growth. When, as now, oil costs are still rising even as prices fall there is of course a particularly savage effect on the profits of oil companies, squeezed from both ends.

"They must and will rapidly adapt by reducing expenditures and therefore oil production with the fairly obvious result that prices will rise again. The only longer-term price relief and net benefit to the economy will come when either we reverse recent history and start to find more oil more cheaply, which will be like waiting for pigs to fly, or when cheaper sources of energy displace oil."

And so for Jeremy Grantham, nothing fundamental has changed about our relationship with oil: pigs still don't fly.



WSJ : Brevan Howard to Close Commodity Fund Due to Poor Performance

Brevan Howard to Close Commodity Fund Due to Poor Performance
Fund, With $630 Million In Assets, Is Down 4.3% This Year

Brevan Howard Asset Management LLP plans to close its commodity hedge fund following recent poor performance, according to two people familiar with the matter.

The fund, managed by Stephane Nicolas, has $630 million in assets. It lost 4.2% last year and is down 4.3% this year to the end of October, according to performance data reviewed by The Wall Street Journal.

It is not clear what Mr. Nicolas’s role might be following the commodity fund’s closure, a person familiar with the matter said. Attempts to reach Mr. Nicolas were unsuccessful.

Brevan Howard is among Europe’s largest hedge fund managers with about $37 billion in assets.

Brevan’s Macro fund, managed by billionaire Alan Howard , has about $26.5 billion in assets. The macro fund, which has never reported an annual loss, has faced headwinds this year, struggling to deliver a positive performance in the ultralow interest rate environment. The Wall Street Journal reported in August that the firm sharply cut risk levels in the macro fund during the first half of the year.

Some other specialized funds managed by Brevan Howard haven't fared well recently, including the firm’s currency and emerging markets-focused funds, leading to the departure of several high-profile staff.