×

Lionsgate Shares Jump on Possible Wanda Deal

Shares of Lionsgate jumped 3% following a report that Wanda Group wants to own a controlling stake in the company.

The stock gained $1.02 to $34.92 on the New York Stock Exchange on Monday. During the session, the shares were up over 5% to $35.69 before falling back.

Wanda’s chairman, Wang Jianlin, made the disclosure to Bloomberg about the possible Lionsgate investment. Jianlin  also said Wanda has had talks about investing in Metro-Goldwyn-Mayer and that he wants to buy unnamed European distributors as part of a plan to control 20% of the global cinema market by 2020.

Spokespeople for Lionsgate and MGM did not immediately respond to requests for comment.

The report said Wanda wants only to purchase a majority share in Lionsgate and that the talks are in the early stages.

“China’s movie industry is booming at unprecedented speed,” Jianlin told Bloomberg. “Buying a well-known U.S. company will help our distribution overseas.”

With Monday’s gain, the stock has recouped its losses from Nov. 21, when it fell 5% in the wake of disappointing opening day grosses for “The Hunger Games: Mockingjay — Part 1.” The film has grossed $225.6 million domestically and $254.4 million internationally in its first dozen days, but that’s short of the top end of projections.

Analyst Tuna Amobi of Standard and Poors told Variety that he’s not surprised by Wanda’s interest in the wake of recent speculation that Chinese Internet giant Alibaba and CBS Corp. were separately considering an investment in Lionsgate. More possible bids may emerge, he added.

“There are a lot of foreign investors sitting on the sidelines,” Amobi said. “I don’t think that the situation is quite at the point where Lionsgate would be forced to declare an auction.”

Matthew Harrigan of Wunderlich Securities said Wanda’s interest is more likely to lead to a concrete offer than that of Alibaba because of its existing investments in entertainment, which included a $2.6 billion deal in 2012 deal to buy the AMC movie chain.

“Strategically, I think the Wanda deal offers more opportunity,” he added. “Wanda certainly has a higher entertainment component than Alibaba and seemingly firmer intentions to make an investment.”

Alibaba is reportedly interested in acquiring Lionsgate co-chairman Mark Rachesky’s 37.4% stake in the studio. Rachesky met in October with Wanda’s Jianlin in China, according to the Bloomberg report.

Wanda recently spent $1.2 billion to buy a Wilshire Boulevard site that will serve as the hub for its entertainment investments.

“The best deal is with someone who is relatively passive on creative involvement and can afford better access in Asia,” Harrigan said “And that certainly describes Wanda.”

Marla Backer, an analyst with Ascendiant Capital Markets, noted that Lionsgate presents potential investors with a unique opportunity.

“Content is very important right now as new emerging platforms proliferate,” she noted. “DreamWorks Animation and Lionsgate are the only pure play studios available of a certain size, so it doesn’t surprise me that someone would be interested.”

Brent Lang contributed to this report.

Popular on Variety

More Film

  • Betty Gilpin'Stuber' film premiere, Arrivals, Regal

    'GLOW' Star Betty Gilpin in Talks to Join Chris Pratt in 'Ghost Draft' (EXCLUSIVE)

    Fresh off her Emmy nomination for Netflix’s “GLOW,” Betty Gilpin has found her next project. The actress is in talks to join Chris Pratt in “Ghost Drama,” a sci-fi action film from Skydance and Paramount. Gilpin would join a cast that also includes “Handmaid’s Tale” star Yvonne Strahovski. Directed by “Lego Batman” filmmaker Chris McKay [...]

  • Stephan Komandarev on Sarajevo Player ‘Rounds’

    Director Stephan Komandarev on Sarajevo Player ‘Rounds’ and His Bulgarian Trilogy

    Bulgarian director Stephan Komandarev earned critical acclaim for his 2017 feature “Directions,” which was selected for Cannes’ Un Certain Regard sidebar. The first installment in a planned trilogy about the social inequality and moral ills plaguing both Bulgaria and Europe at large, the film followed six cab drivers over the course of 24 hours as [...]

  • Meryl Streep Best Movie Lines

    HBO Max Lands Steven Soderbergh's Next Film Starring Meryl Streep

    HBO Max has picked up Steven Soderbergh’s next film, the comedy “Let Them All Talk” starring Meryl Streep. Joining Streep in the ensemble cast are Candice Bergen, Dianne Wiest, Lucas Hedges and Gemma Chan. The screenplay was written by short story author and MacArthur Fellow recipient Deborah Eisenberg. It’s the story of a celebrated author [...]

  • Bruce Springsteen FYSEE Opening Night with

    Bruce Springsteen Drops Introspective Trailer for 'Western Stars' Film

    While initial reports about Bruce Springsteen’s forthcoming documentary around his recent “Western Stars” album said that it would essentially be a concert film, the first trailer for it, which dropped today, suggests it’s going to be a more introspective outing, more in line with his autobiographical performances at “Springsteen on Broadway” in 2017 and 2018, [...]

  • Phyllis Nagy

    Writers Guild Presidential Candidate Phyllis Nagy Blasts Strategy on Agencies

    Phyllis Nagy, who is challenging Writers Guild of America West’s president David Goodman, has warned of dire consequences from the current stalemate between the WGA and Hollywood agents. Nagy, who announced her candidacy on July 22 as the head of Writers for Negotiation, is running on a platform that the WGA needs to get back to [...]

  • Chris Pine to Play Nixon Attorney

    Chris Pine to Play Nixon Lawyer John Dean in Amazon Studios Feature Pitch (EXCLUSIVE)

    Amazon Studios has nabbed a feature pitch with “Wonder Woman” star Chris Pine attached to play John Dean, a pivotal figure in the Watergate scandal. The film will follow the life and political saga of Dean, who served as White House counsel for President Richard Nixon from July 1970 through April 1973. Amazon bought the [...]

  • 'Bombay Rose,' Venice Premiere, Debuts Trailer

    'Bombay Rose,' Venice Film Festival Premiere, Debuts Trailer (EXCLUSIVE)

    Variety has been given exclusive access to the trailer for animated film “Bombay Rose,” which will have its world premiere opening Venice Critics’ Week on Aug. 28. The film, written and directed by Gitanjali Rao, will also play in the Contemporary World Cinema strand at the Toronto Film Festival on Sept. 7. “Bombay Rose” is [...]

More From Our Brands

Access exclusive content