Kadokawa turns distrib into subsid

Company to buy shares, delist Nippon Herald Films

TOKYO — The Japanese distribution market is continuing to consolidate and restructure.

Kadokawa Holdings, the umbrella company of Japan’s most aggressively expanding media firm, will make the struggling independent distrib Nippon Herald Films a subsidiary by early August via a share swap, Kadokawa announced Thursday.

Kadokawa Pictures, one of KH’s core holdings next to publishing company Kadokawa Shoten, acquired slightly over 40% of Nippon Herald Films shares a year ago. KH will buy those shares and delist Nippon Herald Films from the Jasdaq market, when it will cease to exist as an independent company.

Since the share purchase last year, it was an open secret in Tokyo’s film distrib circles that KH was keen to strengthen its distribution and exhibition venture by targeting Nippon Herald Films.

Latter has hit hard times with lackluster results for many films in its slate. It has revised downward its earnings estimate for the fiscal year ending March 31 and expects a group net loss of $44.2 million after a net loss of $11 million a year ago.

KH wants Nippon Herald Films’ 35 screens in six locations, plus four arthouse screens in two locations.

KH also owns 20% of United Intl. Cinemas in Japan, with 98 screens in 11 locations, and is expanding this brand together with majority owner and partner Sumitomo.

Six months ago distrib Gaga Communications was bailed out by cable radio and broadband company Usen. Gaga continues to exist under its old name with a total management overhaul and downsizing.

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