A Legendary Name for Sony's Shopping List
Kazuo Hirai is ready to go shopping.
Sony Corp.'s CEO told Bloomberg Television anchor Emily Chang that he wants to be part of the conversation in a reshuffle of ownership among Hollywood studios.
He already put up his hand to buy the film and TV businesses of 21st Century Fox Inc., but eventually lost out to Walt Disney Co. It's unlikely he'll get the other major studio currently up for grabs, Weinstein Co., as that looks set to go to a consortium headed by a former Obama cabinet member, Maria Contreras-Sweet. To be sure, there's no indication Sony Pictures -- whose recent films include Jumanji: Welcome to the Jungle -- even made a play for it.
Yet Kaz was clear that bankers should put him on speed dials for studios hanging out their shingles.
We want to make sure that as these deals come into the forefront, that we are able to be a part of those discussions, ascertain whether an acquisition here makes sense or not, and make sure that we continue to be a major industry player in Hollywood.
And there is such an outfit that may be seeking a buyer this year: Legendary Entertainment.
Chinese billionaire Wang Jianlin jumped the gun when his Dalian Wanda Group Co. announced in January 2016 that it would pay $3.5 billion cash for Legendary. It turned out entertainment is one of the areas of overseas investment where Beijing doesn't want to see Chinese companies pumping money. Wanda has since been punished for this and other transgressions.
Wang's situation was further complicated by the fact that regulators won't allow him to inject Legendary into Shenzhen-listed Wanda Film Holding Co. Tellingly, Wanda Film said Monday that a reorganization of its movie, drama, production and distribution and online gaming businesses won't include Legendary.
Kaz and Wang shouldn't be strangers after Sony and Dalian Wanda agreed in September 2016 to collaborate on film projects in an open-ended deal that would see Wanda help the Japanese company tap the China market.
Meanwhile, Legendary -- the studio behind Man of Steel, Kong: Skull Island and Jurassic World -- has been shedding executives since Wanda bought it. Sony, on the other hand, could do with another hit machine in its stable. Kaz was forced to take a 112 billion yen ($1 billion) writedown of Sony's film unit during the fiscal year ending March 2017 because of poor box-office performance (apparently the Wanda touch wasn't enough).
There's no sign yet that Wang will be forced to sell Legendary, or that he wants to, but beyond Wanda's possible breach of investment rules it also seems that China's government isn't keen on his high profile and profligate approach to dealmaking. To take the heat off himself and his sprawling property empire, as well as raise cash, a sale of Legendary may be most expedient.
Luckily for Wang, Sony's Kaz is standing by.
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