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HONG KONG, Oct 24, 2011 - (ACN Newswire) - ChinaVision Media Group Limited ("ChinaVision" or the "Company") , together with its subsidiaries, (the "Group")(SEHK: 1060) today announced that it has entered into a Sale and Purchase Agreement in which the Group has conditionally agreed to acquire the entire issued share capital (the "proposed acquisition") of China Entertainment Media Group Limited ("CEMG"). Furthermore, the Group has entered into a Subscription Agreement (the "subscription") with a wholly-owned subsidiary of Tencent Holdings Limited ("Tencent"; SEHK: 0700), and introduced Tencent as a strategic investor.
The proposed acquisition and subscription creates a leading media entertainment company with proven capabilities to produce and distribute a diverse portfolio of premium and differentiated multimedia content. The total consideration of the proposed acquisition is approximately HK$2,016.3 million. The consideration will be satisfied by the issue and allotment of 5,040,750,000 new shares to CEMG's shareholders. In addition, as part of the subscription, ChinaVision will issue 619,400,000 new shares ("subscription shares") to Tencent for a total consideration of approximately HK$247.8 million. The subscription shares represent approximately 8.0% of the issued share capital of ChinaVision as enlarged by the proposed acquisition and subscription.
ChinaVision is an integrated media entertainment company and is principally engaged in the film, television, print media, and mobile new media businesses in China. CEMG is a fast-growing media entertainment company that was invested by Sequoia Capital during its early stages and is principally engaged in the production and distribution of films, television drama series and satellite television programmes and television advertising in China. CEMG works with a team of well-recognised directors, screenwriters, actors and actresses to originate movies through its director workshops as well as through a strategic cooperation with China Film Group Corporation ("CFGC"). It has also entered into a ten year cooperation agreement with the Gansu Provincial Film and TV Broadcast Group to exclusively operate the television advertising and content programming segments of the Gansu Satellite Television Network and Gansu Local Television network.
The proposed acquisition represents a significant milestone for the Group. Through the proposed acquisition ChinaVision hopes to:
-- Consolidate and enhance core competitive strengths of both parties. CEMG's has extensive experience in the production and distribution of film and television drama series, while ChinaVision has competitive advantages in print media and mobile new media. Through this acquisition, the Group expects to be able to enrich its portfolio of media content and expand its comprehensive range of content delivery and promotion platforms.
-- Capitalise on favourable market conditions in order to capture more growth opportunities. CEMG's portfolio of film and television programmes as well as its highly recognised and talented production team is expected to strengthen ChinaVision's competitiveness in the industry. It is forecasted that as cinema networks expand and new theatres are built, China's box office revenues will continue to grow rapidly and demand for quality box office movies will increase. Through the proposed acquisition, ChinaVision will be better positioned to monetize on China's fast growing and increasingly dynamic box office revenues.
-- Gain additional opportunities for cross-channel sales and improve operating efficiency through integration of resources in content and delivery platform.
In addition to the proposed acquisition, the Group has entered into a Subscription Agreement with a wholly-owned subsidiary of Tencent. As part of the subscription, the Group and Tencent have, in conjunction with the subscription, entered into a Framework Strategic Cooperation Agreement (the "cooperation agreement"). Tencent is a leading provider of integrated Internet services with the most Internet users in China. The Group believes that this strategic cooperation with Tencent will give the Group additional resources to promote its content and access to various new media platforms including Instant Messaging QQ, web portal QQ.com, Tencent online video platform, the QQ Game platform, the multi-media social networking service Qzone and wireless portal.
Under the cooperation agreement, the Group and Tencent plan to collaborate in the following areas:
-- to cooperate on promoting the Group's films, television drama series, artists, new media contents, mobile entertainment contents, and related events on Tencent's online platform, including, for example Tencent Mircoblog, QQ.com, and Qzone;
-- to distribute the Group's films and television drama series online via Tencent's online video platform and to co-produce premium video contents;
-- to cooperate on promoting the Group's print media offerings such as magazine and newspaper.
The subscription is not only an opportunity to create a constructive collaborative environment for all parties involved but also a way for the Group to further enhance its capital base. The Group intends to use the proceeds from the subscription to improve its financial strength and support general working capital needs. After the proposed acquisition and subscription, the Group aims to fully integrate its diversified suite of content offerings and platforms in print, television, mobile and online media and become a leader in China's media entertainment industry.
Mr. Dong Ping, Chairman of ChinaVision said, "This acquisition will allow ChinaVision to perfect its footprint in the media value chain and become one of the few players in the industry with both the assets to produce premium content and multiple media platforms to distribute content. Today's announced transaction will also enhance the Group's future profitability and deliver strong returns for our shareholders."
Mr. Martin Lau, President of Tencent said, "We are excited to become ChinaVision's strategic investor and partner. Under the collaboration of both parties, we believe we can realize the synergies that this partnership can bring in future."
Mr. Neil Shen, Founding Managing Partner of Sequoia Capital China said, "With favourable policies and market demand on its side, this consolidation is strategically compelling for ChinaVision in all angles and will take its core competitive strengths to a higher level."
Credit Suisse Group AG and Freshfields Bruckhaus Deringer are the financial and legal advisors, respectively, in connection with the proposed acquisition and subscription.
About China Vision Media Group Limited
ChinaVision (SEHK: 1060) is an integrated media entertainment company and is principally engaged in the film, television, print media, and mobile new media businesses in China. Its television and film business produces, distributes and licenses film and television programs, and has had an interest in the production and distribution of several box office hits and top rated TV dramas such as "Let the Bullets Fly" and "The Invincible Agent" etc. Its print media business is involved in newspaper advertising and the distribution of the Beijing Times, a leader in the Beijing morning post retail market, as well as publishing and distribution of madame FIGARO, a premium fashion magazine for women. Under its mobile new media business, the Company develops and distributes mobile television, mobile games and other mobile value-added services.
About China Entertainment Media Group Limited
CEMG is a fast growing media entertainment company and is principally engaged in the production and licensing of film, television and satellite television programmes and television advertising in the PRC.
About Tencent Holdings Limited
Tencent (SEHK: 0700) provides a wide range of internet and wireless value-added services to deliver diverse online interactive experience to internet users. Through its various online platforms, including Instant Messaging QQ, web portal QQ.com, QQ Game platform under Tencent Games, multi-media social networking service Qzone and wireless portal, Tencent serves the largest online community in China and fulfills users' needs for communication, information, entertainment and e-commerce on the Internet. Tencent is primarily engaged in three businesses: Internet value-added services, mobile and telecommunications value-added services and online advertising. Tencent Holdings Limited is listed on the Main Board of the Hong Kong Stock Exchange and has been included as one of the 43 constituent stocks of Hong Kong Hang Seng Index since 10 June 2008.
About Sequoia Capital
Established in 1972, Sequoia Capital is one of the most renowned venture capital firms in the world. Many of the companies it had invested in became global leading companies such as Apple, Cisco, Oracle and Google. Sequoia Capital China was formed in September 2005 and has made numerous investments in fast growing companies in Internet, technology and media, consumer products and services, health care and pharmaceutical as well as clean energy industries. More than a dozen of the companies it invested are listed in the stock markets in the US, Hong Kong and China.
Contact:
Strategic Financial Relations Limited
Joanne Lam
+852-2864-4816
joanne.lam@sprg.com.hk
Maggie Au
+852-2864-4815 / 9871-8770
maggie.au@sprg.com.hk
Rebecca Yu
+852-2864-4862 / 2864-4862
rebecca.yu@sprg.com.hk
Fax: +852-2804-2789 / 2527-1196
Website: www.sprg.com.hk
Topic: Merger & Acquisition
Source: ChinaVision Media Group Limited
Sectors: Daily Finance, Broadcast, Film & Sat
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From the Asia Corporate News Network
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