China’s Dalian Wanda trims AMC exposure with Silver Lake deal

A logo of Wanda Group is seen at a Wanda Group and China Union Pay joint news conference in Beijing, China, March 2, 2017. (Reuters pic)

LEAWOOD: AMC Entertainment Holdings Inc said on Friday it bought back 24 million shares from its top investor Dalian Wanda Group and issued US$600 million worth of convertible notes to private equity firm Silver Lake.

Earlier in September, Reuters reported Wanda was exploring a deal to cut its stake in AMC, as the Chinese billionaire Wang Jianlin’s real estate-to-media conglomerate was under pressure from the country’s regulators to reduce overseas holdings.

After the transaction, Wanda now owns about 38% of AMC shares, down from its previous majority stake of about 60%. As part of the deal, Silver Lake will get a seat on AMC’s board and a two-year right of first refusal on certain future transfers of AMC’s shares by Wanda.

Wanda acquired a majority stake in AMC in 2012 for US$2.6 billion, in what was then the largest overseas acquisition by a privately held Chinese company and Wanda’s first foray into the United States and Canada.

In 2017, Chinese regulators told banks to stop providing funding to companies such as Wanda, HNA Group Co Ltd and Anbang Insurance Group Co Ltd for overseas acquisitions, amid concerns over financial overstretching.