CJ CGV Gains After Agreeing to Buy Turkey's Mars

  • Deal gives CJ CGV a stake in Turkey's largest cinema chain
  • Unidentified investors agree to buy remaining shares

CJ CGV Co., South Korea’s largest operator of multi-screen theaters, gained in Seoul trading after agreeing to buy a stake in Mars Entertainment Group, adding Turkey’s biggest cinema chain to its global network.

The shares jumped as much as 4.1 percent, the biggest intraday gain in more than a month, to 101,000 won before trading at 99,800 won as of 9:06 a.m. local time.

CJ CGV and its unidentified partners agreed to pay 605 million euros ($688 million) for Istanbul-based Mars, according to a regulatory filing from CJ CGV on Monday. The South Korean company didn’t identify the other investors.

The transaction means Mars Cinema Group, which owns 83 multiplexes with 736 screens under the Cinemaximum brand, has an enterprise value, or market capitalization plus debt, of $800 million, the buyers and sellers said in a joint e-mailed statement on Monday. The deal brings the South Korean company closer to its target of operating 10,000 screens globally by 2020. The unit of South Korea’s CJ Group has said it is also considering buying the U.K.-based Odeon & UCI cinema chains from Terra Firma Capital Partners.

Chinese billionaire Wang Jianlin’s Wanda Cinema Line Co. and investors from the U.S., Mexico, U.K. and Japan were among potential bidders for Istanbul-based Mars, three people with knowledge of the plan have said.

CGV already operates 249 multiplex theaters with a total of 1,853 screens in South Korea, the U.S., China, Vietnam, Indonesia and Myanmar. CJ Group is among the family-run conglomerates known locally as the chaebol, that dominate South Korea’s corporate landscape. CJ was formerly part of the Samsung Group, and it has been led by Samsung family members even after separating in 1993.

CJ sales reached 29.1 trillion won ($25 billion) in 2015. The company targets 100 trillion won in revenue by 2020, with 70 percent coming from overseas.

Demand for movies is rising in Turkey, where cinema ticket revenue jumped 23 percent last year, according to state statistics office data. The number of theaters nationwide increased 3.2 percent, the data show.

(Corrects first deck headline, third paragraph to remove reference to gym franchise, which isn't included in the sale.)
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