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China’s Fosun and Yu Dong to Buy Fox’s Stake in Bona Film

HONG KONG — Fosun Intl., the Chinese conglomerate that is poised to back Jeff Robinov’s upstart Studio 8 company, is to increase its stake in producer, distributor Bona Film Group.

At the same time Bona’s chairman and CEO Yu Dong is to buy out the 19.3% stake in the company that is currently held by 21st Century Fox. Yu will pay $71.4 million for the stake, which was originally acquired by 21st Century Fox (then News Corp.) in May 2012. The move was said to have been initiated by Rupert Murdoch’s then-wife, Wendi Deng.

The companies say that the stake disposal will not have any impact on five film co-productions agreed by Bona and 21st Century Fox.

“We remain committed to our current co-productions with Bona as well as to exploring future collaboration with them and others in the exciting and rapidly growing Chinese film market,” said Jim Gianopulos, chairman and CEO, Twentieth Century Fox Film, in a prepared statement.

Fosun has agreed to purchase a 13.3% interest in Bona, in addition to the 7.5% stake it acquired in late 2013, with the new shares coming from Yu’s personal holding. Cost of the stake is $49 million.

Following the close of the transaction, Yu will own approximately 32.3% (including 2.7% from stock options), and Fosun some 20.8% of the company’s ordinary outstanding shares.

“This additional investment by Fosun will further contribute to Bona’s efforts in achieving its ambitious strategic goals across all segments, and speaks to Fosun’s commitment to the entertainment industry as a whole as well as its recognition of Bona as the industry leader in China with strong potential going forward,” said Yu.

“This additional investment is another strategic foothold for Fosun in the global movie and entertainment industry,” said Guo Guangchang, chairman of Fosun. “Our partnership will combine the resources of Fosun and Bona to capture attractive opportunities in the fast growing domestic movie industry, as well as the opportunities that will emerge through the cooperation in the movie business between the United States and China.”

Fosun, one of China’s largest conglomerates, with interests ranging from pharmaceuticals to insurance, is stepping up its entertainment interests. Last month it announced that it would back former Warner Bros. chief Robinov’s new company. Some reports have put the value of its funding for Studio 8 as high as $200 million, though Fosun has not confirmed that.

Chinese producer distributor Huayi Brothers Media was also announced as a backer of Studio 8, but unconfirmed reports now say that deal is dead. It is unclear whether investments from Huayi and Fosun could sit along side each other or would be mutually exclusive.

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