HONG KONG — Beijing Galloping Horse, a high-flying private sector Chinese film company, is entertaining a number of takeover bids.
Galloping Horse became known internationally for its 2012 takeover of troubled VFX house Digital Domain in a joint bid with India’s Reliance MediaWorks. Galloping Horse is currently in post-production on John Woo’s $50 million two-part epic “The Crossing” (pictured).
Word of a takeover of Galloping Horse emerged initially on social media and was carried by local and financial media, but they reported that the company had been sold to SMG.
“Those reports are simply wrong,” a source close to the negotiations told Variety. “There are a number of companies currently doing due diligence. We are maybe two weeks away from knowing which one to go with.”
Officially the company is saying nothing. And a spokesman for CMC said it was company policy not to comment on market rumors.
Galloping Horse, which emerged originally from the advertising industry, was one of the fast-moving, second tier Chinese film producers and distributors. And until late last year it had planned for either an IPO or a backdoor listing of its stock through a takeover of an existing company. It is a significant producer of TV series and had been backer of films including Zhang Yibai’s “Eternal Moment” and Ning Hao’s controversial hit “No Man’s Land.”
But crisis struck the company when founder, chairman and CEO Li Ming died suddenly on Jan. 2, reportedly in police custody.
Later in January, Li Jingyan, Li’s widow was appointed chairman and CEO. But there have been repeated hints of infighting between Li Jingyan and Li Ming’s two sisters, who are significant shareholders in the company. The sale to a third party is a likely solution to the internal management problems. Chinese media reports say that Li Jingyan will continue as chair of the company, but leadership seems unlikely to be settled until the buyer is decided.
Even while Li Ming was alive the company reportedly received takeover approaches from both Huayi Brothers Media and Zhejiang Huace. The principal attraction of Galloping Horse is likely to be the company’s TV series library and its production operations.
Galloping horse sold off its stake in Digital Domain in 2013. That 70% holding is now controlled by Hong Kong-listed Digital Domain Holdings Ltd.
China Media Capital has stakes in Oriental DreamWorks and Imax China, owns three TV channels and the massive Fortune Star film library, both acquired from News Corp. CMC recently launched a U.S. dollar-denominated funding round and has high-profile backers that include Time Warner, RatPac and advertising giant WPP.
Both CMC and SMG are headed by Li Ruigang.
SMG is currently state-owned, but has filed plans for an IPO with China’s securities regulator. SMG has extensive media interests that stretch from cinema exhibition and film production to ownership of regional TV stations and new media activities.
“The Crossing” is unlikely to be affected by any takeover of Galloping Horse. The film is being distributed in China by LeVision Pictures, with the first installment set for release in December, and the second around Chinese New Year in February 2015.