Chinese group’s acquisition in Wanda could impact pending sale of HOYTS Cinemas

The acquisition by Beijing production house China Ruyi’s of 51% in the Dailian Wanda Group - who own Wanda Film, China’s largest cinema operator and HOYTS’ parent company - has the potential to imapct the pending sale of HOYTS Cinemas. 

Hoyts is Australia’s second largest movie theatre operator with 46 multiplexes housing 412 screens, according to 2022 data from Screen Australia. It also owns Val Morgan, Australia’s biggest cinema advertising firm.

Wanda Cinema Line, itself China’s biggest theatre operator, has appointed Credit Suisse and Nomura to handle the sale.

The Chinese film production and streaming group, China Ruyi, bought an initial 49% stake last June, making it the sole owner of the investment group – and the Australian cinema chain.

Founded in 1909, Hoyts has had a long history of periodic corporate upheavals. By 2000, it was the world’s seventh largest exhibition firm and a public company with overseas operations in the U.S. and New Zealand, before being acquired by Kerry Packer. Later, it was sold to private equity firm Pacific Equity Partners (PEP) in 2007 for A$440 million, and then sold to ID Leisure Ventures in 2014, who sold it on the Dailian Wanda Group the following year, for a reported A$1.15 billion.

Billionaire Wang Jianlin bought HOYTS in 2015 for his Dailian Wanda Group, which has a vast portfolio, including manufacturing, hospitality, real estate, and financial services.

While holding the controlling stake of HOYTS, Jianlin was actively shopping the cinema chain to potential buyers; Pacific Equity Partners reportedly offered just over A$700 million for HOYTS last June. At the time, HOYTS was listed as a $1 billion asset on the books of Wanda Film.

News of the sale process was first reported by the Australian Financial Review, which noted that the bankers are hoping for a A$1 billion ($670 million) valuation with a private equity firm as the most likely purchaser.

Hoyts Group Chief Executive Damian Keogh told the AFR the company is “aware of Wanda selling down their majority shareholding but understand the deal is still being completed and are yet to engage with the new majority shareholders”.