Oct. 22 (Bloomberg) -- ChinaVision Media Group Ltd., a Hong Kong-based producer of films and television programs, said it agreed to acquire China Entertainment Media Group Ltd. for HK$2.02 billion ($259 million) in stock.
ChinaVision also plans to issue 619.4 million shares to a unit of Tencent Holdings Ltd., China’s biggest Internet company by revenue, at 40 Hong Kong cents each, according to a Hong Kong stock exchange filing yesterday. Proceeds from the HK$247.8 million sale will be used for working capital, the company said.
China Entertainment incorporated in January after acquiring film and television producer Asian Union. The company is aiming to produce four to six movies a year, and four to five “large- scale television dramas,” according to the filing. ChinaVision controls advertising rights for the Beijing Times newspaper and develops and distributes entertainment programs and games for mobile devices.
“The target conducts its principal business of producing and distributing films and television and satellite television programs through the employment of a seasoned management team with over 10 years of experience in the industry,” ChinaVision said in the filing. “This complements the company’s business.”
ChinaVision said its consideration shares for the China Entertainment acquisition are equal to 242 percent of existing share capital. The deal won’t result in a change of control at ChinaVision.
ChinaVision’s stock, which has been suspended since Sept. 20, will resume trading in Hong Kong on Oct. 24, the company said. The shares had dropped 34 percent this year, compared with the now 22 percent decline in the benchmark Hang Seng Index.
--Editors: Romaine Bostick, Donna Alvarado
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