In a regulatory filing on Monday, Wanda Cinema cited securities market conditions as one reason for the apparent change of heart and as well as the difficulties of integrating Hollywood independent, Legendary.
Legendary is understood to have recorded substantial losses in 2015, though the statement from Wanda Cinema says this may be reversed in 2016.
“After Wanda Cinema acquired Legendary Pictures, they are expecting 2016 to be a profit year. However, due to the short time of this acquisition, it needs to run independently for a period of time to show the stability of earning forecasts,” the statement says.
Wanda Cinema has seen its shares suspended from trading since February, the month after the Legendary deal was formally announced. It will hold an investor presentation later this week to clarify the situation further.
Parent company Dalian Wanda announced in January that it was to pay up to $3.5 billion for Legendary. At the same time, group chairman Wang Jianlin announced that he was considering IPOs for other film related subsidiaries, possibly distribution or production.
Later it emerged that Wanda Media was the preferred vehicle for the Legendary takeover and that Wanda had begun to bring outside investors in to Wanda Media to co-finance the deal. Further IPOs appeared to be off the table and instead in May it was announced that Wanda Cinema would buy Wanda Media for $5.7 billion in a mixture of cash and shares.
At the end of May, China’s stock market regulators said that they were asking for more information on the Wanda Media takeover. They appeared to be concerned by the high valuation of the deal and by the identity of the companies co-investing in Wanda Media alongside Wanda Cinema Line.