China Company Scraps Deal for Hollywood's Millennium FilmsBloomberg News
Purchase to continue after Recon drops original plan, Xia says
Chinese government steps up scrutiny of outbound deals
Recon Wenyuan Cable Co., a wire and cable company controlled by Chinese businessman Tony Xia, has scrapped plans to buy U.S.-based Millennium Films amid a Chinese government campaign to discourage some overseas purchases.
Instead, Xia will pursue the deal through an unspecified unlisted entity, he said in a Twitter post Thursday.
Recon Wenyuan said it and the seller had agreed not to pursue the deal, because the transaction cannot be completed by a deadline set at Aug. 31, according to a regulatory statement on Thursday. Recon Wenyuan will instead pursue “strategic cooperation” with Millennium Films, according to the statement.
Recon Group representatives declined to comment beyond Wenyuan’s statement. Xia couldn’t be reached for comment.
Recon Wenyuan shares fell 1.3 percent to close at 9.35 yuan in Shenzhen trading Thursday.
Chinese authorities heightened their campaign to curb some overseas deals this month as part of a drive to reduce leverage and risk in the financial system. The restrictions target companies making investments abroad in areas such as real estate, hotels, entertainment and sports clubs.
Founded in 1996 by Avi Lerner and Trevor Short, Los Angeles-based Millennium Films produced the three “Expendables” movies, according to researcher Box Office Mojo. The company produces, finances and handles international sales for five to eight star-driven movies a year, generally with budgets of between $20 million and $80 million, according to its website.
Last year, Xia’s Recon Group bought the U.K.’s Aston Villa soccer team from former Cleveland Browns owner Randy Lerner.
— With assistance by Jing Yang De Morel