Dalian Wanda Commercial Management Group (DWCM), the tycoon’s flagship, will lower its stake in Zhuhai Wanda Commercial Management to 40 per cent, while outside investors led by Asia-focused private equity fund PAG will own 60 per cent of the unit, according to separate statements released by the parties on Tuesday.
The changes followed an agreement to unravel an investment plan in August 2021, when outside investors injected fresh capital in Zhuhai Wanda, hoping to profit and exit via an initial public offering in Hong Kong before the end of 2023.
PAG and other investors, including units under Ant Group, Tencent Holdings and Citic Securities, spent 38 billion yuan, then valued at US$5.9 billion, in Zhuhai Wanda in August 2021. That investment deal was struck at 24.84 yuan or US$3.86 per share, valuing Zhuhai Wanda at US$28 billion.
The plan was to list Zhuhai Wanda before the end of 2023, failing which the investors could ask DWCM to buy back their stakes with a minimum return of 8 per cent.
Wang Jianlin makes fourth bid to list Zhuhai Wanda in Hong Kong to avert refund
Wang Jianlin makes fourth bid to list Zhuhai Wanda in Hong Kong to avert refund
DWCM redeemed the investment without offering any details, PAG said in its statement on Tuesday. Investors agreed to “reinvest in Zhuhai Wanda with the proceeds”, the statement added.
“Dalian Wanda and PAG, together with the other major shareholders, have pledged to further improve the governance of Zhuhai Wanda, maintain the stability of the management team, and jointly support the long-term growth of the business,” PAG said. “This new agreement reflects our confidence in Zhuhai Wanda’s growth potential and its management capabilities.”
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Zhuhai Wanda has consistently outperformed its financial targets. It had an after-tax profit of 5.3 billion yuan in 2021, 7.5 billion yuan in 2022 and an estimated 9.5 billion yuan in 2023, according to statements on Tuesday, matching forecasts in its provisional listing documents.
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Last week, Wang agreed to sell a 51 per cent stake in Beijing Wanda Investment, which controls Wanda Film Holding, to Tencent-backed China Ruyi Holdings. He had earlier sold a 49 per cent stake in July to help repay US$400 million worth of maturing bonds.