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Lionsgate in Talks with China’s Hunan TV on $1.5 Billion Investment

In an aggressive move to tap into Chinese investors, Lionsgate is in advanced conversations with Hunan TV and Broadcast Intermediary Co Ltd. on an agreement that would carry an overall value of $1.5 billion over the next three years.

The discussions cover financing, distribution, local production in China, and television, according to sources familiar with the situation.

Reuters first reported Wednesday on a regulatory filing on the Shenzhen Stock Exchange that revealed under the agreement, Lionsgate would help to distribute Chinese films produced by Hunan TV in overseas markets and that Hunan TV and Broadcast would set up a unit in the United States.

The filing disclosed that Hunan expects to invest about 25% percent of the combined $1.5 billion in spending and will set up a unit in Delaware with $3 million in capital.

Lionsgate, best known for “The Hunger Games” movies, remained silent last fall on a report that Chinese e-commerce giant Alibaba was considering buying a controlling stake in the studio by acquiring the 37% stake held by hedge fund manager and Lionsgate co-chairman Mark Rachesky.

Hunan is the second-largest TV broadcaster in China.

Lionsgate and Alibaba teamed up last year on a subscription streaming service for mainland China through Alibaba’s latest generation of set-top box.

The biggest investment so far by Chinese media in the U.S. was Dalian Wanda Group’s 2012 purchase of U.S. chain AMC Entertainment Holdings for $2.6 billion.

 

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