China billionaire Wang Jianlin reportedly wants to cut AMC stake

Wang JianlinReuters/Tyrone Siu

• Dalian Wanda is considering cutting its stake in AMC Entertainment, according to Reuters.
• Wang Jianlin, founder of Wanda, was listed as the fourth-richest person in China and 26th-richest person in the world.
• AMC shares are down 1.3% following the news.
• Watch AMC trading in real-time here.

Dalian Wanda Group, the real estate-to-media conglomerate company founded by Chinese billionaire Wang Jianlin, is exploring a deal to cut its stake in AMC Entertainment, the largest movie chain in the world, according to Reuters. AMC shares are down 1.3% following the news. 

In the deal, AMC would issue a convertible bond to borrow hundreds of millions of dollars and then use the money to buy back some of Wanda’s 60% stake, Reuters said, citing sources familiar with the matter. Wanda still wants to retain control, according to Reuters.

Wanda purchased a majority stake in AMC in 2012 for $2.6 billion. The original purchase, with $1.9 billion of net debt, was the largest overseas acquisition by a privately held Chinese company and Wanda’s first investment outside of China.

Now, the potential deal to reduce Wanda’s stake in AMC comes under pressure from Chinese regulators who discourage companies to expand overseas holdings through global mergers and acquisitions amid concerns over financial overstretching, Reuters added.

Wang, with a net worth of $30 billion, was listed as the fourth-richest person in China and the 26th-richest person in the world, according to Forbes.

AMC has 1,000 movie theaters globally. Its movie-ticket subscription service, AMC Stubs A-List, has more than 260,000 members in the seven weeks since its launch, making up 4% of the chain’s US attendance, AMC said. The service has been responsible for more than 1 million in attendance at its movie theaters since launch.

As part of its second-quarter earnings report on August 1, AMC posted an earnings per share of $0.17 out of $1.44 billion sales. 

AMC shares are up 23% this year.

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