Film and TV production company Legendary Entertainment has bought out the remaining 50% stake owned by Chinese conglomerate Wanda Group, signifying a coda to China’s once-lofty hopes of becoming a major player in Hollywood.
The Burbank studio self-financed the transaction with cash on its balance sheet and did not use outside funding, Legendary said Monday. The company said it still has “significant excess liquidity” to finance its current business and planned expansion efforts. Legendary did not disclose the amount it paid to acquire Wanda’s stake, though company chief executive Josh Grode said it was a “very attractive price.”
Now that the buyout is complete, Legendary will be solely owned by company management and funds managed by private equity firm Apollo Global Management, which took a minority stake in the “Dune” and “Godzilla x Kong” studio in 2022 with a $760-million investment that helped buy down Wanda’s interest.
Last year, Legendary also got a five-year, $800-million loan led by J.P. Morgan.
“It’s just an exciting moment for the company,” Grode told The Times in an interview.
With company management and Apollo now owning roughly equal amounts of Legendary and jointly controlling the board, “We’re now fully aligned to realize a lot of the value that we built in the business, and we can start to really explore strategic growth opportunities that may have been hampered a little bit by the international component of our shareholders,” Grode said.
Wanda acquired Legendary in 2016 in a $3.5-billion deal viewed at the time as an indication of the deepening ties between Hollywood and China. Wanda chairman Wang Jianlin said at the time of the acquisition that the company wanted to have a “position in the global industry” and had planned to build what it said was the “world’s largest film and television studio” in the eastern Chinese city of Qingdao.
But the company later retreated from those plans and faced greater headwinds breaking into Hollywood as the Chinese government clamped down on overseas investments, particularly those in the media and entertainment space.
Grode said the decision to buy out Wanda now was a “combination of factors,” including Legendary’s “significant amount of excess liquidity in the business.” (Wanda did not have voting control of the company.)
“They were a major shareholder in the company that was looking to monetize different assets, and we were in a position to be able to monetize their investment in the business,” he said.
Founded in 2004, Legendary built a name for itself by investing in such films as “Batman Begins” and the “Hangover” movies. The company has had a successful string of hits recently with the “Dune” movies, as well as selling the Millie Bobby Brown-led “Enola Holmes” to Netflix.
