The Chinese acquisition of Avi Lerner’s Millennium Films is still on course, says the boss of Recon Group, Tony Xia. His denial comes only a day after his publicly listed Recon made a regulatory filing to the Shenzhen Stock Exchange announcing that the deal had exceeded time limits and was being halted.
Xia took to Twitter — which is banned in China — to tag an earlier tweet announcing that Recon had dropped the Millennium deal. “Its not accurate. We changed another entity not pub listed 2continue the deal as the new Chinese policy of Film Industry restriction,” he said on his own Twitter account.
The deal was originally announced in February this year. It saw Recon agreeing to pay $100 million for a 51% stake in Millennium, a mid-sized Hollywood-based independent production and sales company that specializes in genre fare.
Xia’s mention of film industry restrictions is a reference to the Chinese central government policy of discouraging overseas acquisitions by heavily borrowed companies. The government has spent several months restricting such deals — characterized as “exuberant” and “irrational” — through capital controls and behind the scenes directives to the finance and banking industries.
Last month in a formal policy document it spelled out the restrictions on overseas deals in film, entertainment, hotels and property sectors.
Xia and Recon control a maze of publicly listed and private companies stretching from media to foods and football. Xia owns the Aston Villa soccer club that play in the English Premier League. His tweet appears to imply that instead of using the Shenzhen-listed Recon Group, he would get around government restrictions by using a less visible private firm within his corporate empire.