×
You will be redirected back to your article in seconds

Intercontinental to Be Acquired by Media Asia Parent

HK studio buys theater circuit, Paramount distributor

HONG KONGKadokawa Intercontinental, one of Hong Kong’s top exhibitors and distributors, is to be acquired by eSun Holdings, parent company of Media Asia.

Intercontinental is the Hong Kong sub-distributor for both Paramount and DreamWorks Animation.

The transaction sees eSun pay US$27.5 million (HK$213 million) for an 85% stake in Intercontinental.

ESun is buying out the entire 60% stake owned by Japanese publishing and cinema giant Kadokawa Holdings and a further 25% stake owned by LHL. Following the deal, LHL, a company representing Intercontinental’s founder Terry Lai and senior management, will retain a 15% holding.

ESun said that the acquisition will “add immediate scale to [eSun’s] cinema operations” and “also bolster its film and video distribution business in Hong Kong and Macau.”

Intercontinental operates five multiplex cinemas in Hong Kong under the MCL brand and it has a half share of The Grand Cinema, the territory’s largest movie theater. It also operates two complexes in Shenzhen, the mainland China mega-city just across the border from Hong Kong. The company is also involved in games and DVD distribution.

Intercontinental had a net asset value of US$23 million (HK$180 million) as of March this year and in the financial year to Dec 2012 made after tax profits of US$3.56 million (HK$27.6 million), compared with US$3.30 million (HK$25.6 million) in 2011.

Intercontinental became part of Kadokawa in Nov 2005, when its founders took the Hong Kong biz by surprise and sold a 60% majority stake to the Japanese firm. At the time, both Kadokawa and Intercontinental posited their collaboration as a means of expanding into South East Asia and into China. Intercontinental was then also the sub-distributor for Disney and Universal, though Universal has since switched allegiance to Intercontinental’s rival Edko, and Disney has since set up its own HK releasing unit.

The proposed acquisition comes at a difficult time for Hong Kong’s cinema operators. While theatrical box office is edging upwards after a period of steady decline, escalating property rentals mean that exhibitors’ operating costs are running far ahead. Two well-known cinemas have closed this year.

One of the possible logics behind the deal is that, as a significant property developer in Hong Kong and China, eSun may be able to cut better lease terms or take a longer view.

For Media Asia, which has recently consolidated the film, talent management and events promotion activities of eSun, the deal adds another tier of vertical integration. Media Asia/eSun is the last of Hong Kong’s major entertainment groups to add a Chinese exhibition component. Edko has extensive distribution and theater operations in China built up over a period of years. Emperor Motion Pictures recently pacted with UA Cinemas to launch a multiplex circuit in the mainland.

Media Asia, which as a producer was behind “Infernal Affairs” and its remake “The Departed,” has also recently undergone major upheaval. For much of the last decade it was controlled by Hong Kong tycoon Peter Lam (pictured right, with action star Donnie Yen). Last year Lam brought in Alibaba founder Jack Ma, his mainland Chinese Yunfeng fund, and Chinese digital giants Tencent and Sina as major strategic investors. He then re-floated Media Asia on the second tier of the Hong Kong Stock Exchange and installed a new CEO.

In a related transaction another Lam company, Lai Sun Garment (International), is to pay US$16.8 million (HK$130 million) for Kadokawa Intercontinental’s headquarters property in Hong Kong’s New Territories.

Popular on Variety

More Biz

  • Barron HiltonBarron Hilton 1990

    Famed Hotelier Barron Hilton Dies at 91

    Barron Hilton, a famed hotelier who helped expand the Hilton Hotels empire and a founding owner of the Chargers NFL football team, has died, the Conrad N. Hilton Foundation announced. He was 91. “Today the world of hospitality mourns for one of the greats. Barron Hilton was an incredible family man, business leader and philanthropist. [...]

  • Patrick Whitesell and Ari Emanuel WME

    Endeavor Targets Sept. 27 for Stock Debut, IPO Video Tells Company's Origin Story

    After years of preparation, Endeavor is set to make its formal Wall Street debut on Sept. 27, when its stock will begin trading on the New York Stock Exchange. Endeavor has targeted Sept. 26 for the final pricing of its shares. The stock will trade publicly the following day. Earlier this week, Endeavor said its [...]

  • Netflix - Apple TV

    Netflix Stock Drops After CEO Acknowledges 'Tough Competition' Coming From Disney, Apple

    Netflix shares fell as much as 7% Friday to a nine-month low, coming after CEO Reed Hastings commented that the November launches of Disney Plus and Apple TV Plus will introduce a “whole new world” of competition. Hastings, speaking at the Royal Television Society conference Friday in Cambridge, England, said, “While we’ve been competing with [...]

  • Charlie Rose Sexual Harassment

    Charlie Rose Sued for Sexual Harassment by Longtime Makeup Artist

    A makeup artist who worked for Charlie Rose for 22 years has filed a sexual harassment lawsuit, accusing the former CBS and PBS host of years of unlawful behavior toward female employees. Gina Riggi alleges that Rose was verbally abusive with her and would often make derogatory comments about her weight. She also alleges that [...]

  • Rob Stringer

    Sony Music Chief Rob Stringer on Sustaining Growth and Recovering From the 'Dark Times'

    The Goldman Sachs Communacopia conference, now in its 28th year, gives top executives at major companies the opportunity to make their case to investors — and the Goldman analysts the opportunity to keep things on the up and up. While the analysts don’t necessarily grill the executives, they don’t lob softball questions either. That was [...]

  • Frank Grillo'Avengers: Endgame' Film Premiere, Arrivals,

    Matt Phelps Tapped as President of Joe Carnahan, Frank Grillo's Warparty

    Frank Grillo and Joe Carnahan’s Warparty productikon banner has appointed Matt Phelps president of the company. Phelps will head the Los Angeles office and be responsible for overseeing all film and television projects. “We searched long and hard to find the right fit for Warparty and felt that Matt embodied everything that we were looking [...]

  • Jack Gilardi, Longtime ICM Partners Agent,

    Jack Gilardi, Longtime ICM Partners Agent, Dies at 88

    Jack Gilardi, a longtime ICM Partners agent who represented such stars as Burt Reynolds, Sylvester Stallone, Jerry Lewis, Charlton Heston and Shirley MacLaine, died Thursday at his home in Los Angeles. He was 88. Gilardi was known for his gentlemanly style, love of the Los Angeles Dodgers and his skill at representing top actors. He [...]

More From Our Brands

Access exclusive content