Crabtree & Evelyn owner Nan Hai to buy Chinese cinema business (updated)

Orange Sky Golden Harvest Entertainment (Holdings)

25/01/2017 07:28

* To buy cinema business from Orange Sky Golden Harvest 
    * Agreed to pay $480 mln for City Entertainment 
    * City Entertainment manages 76 cinemas in China 
 
 (Adds company comments) 
    By Julie  Zhu 
    HONG KONG, Jan 25 (Reuters) - Chinese investment company Nan 
Hai Corp Ltd  0680.HK  has agreed to buy a Chinese cinema 
business from Orange Sky Golden Harvest Entertainment Holdings 
Ltd (OSGH)  1132.HK  for 3.3 billion yuan ($480 million) as it 
expands in the country's movie sector.  
    Nan Hai, which bought the personal care brand Crabtree & 
Evelyn for $175 million in December 2015, in a statement on 
Wednesday said it will purchase 100 percent of City 
Entertainment Corp Ltd, a subsidiary of Hong Kong cinema 
operator and film production firm OSGH, in a cash deal.  
    The move by Nan Hai, which also owns China's second-largest 
cinema investment and management firm, Dadi Cinema Group, comes 
as the country's film industry is expected to pick up this year 
after a lacklustre 2016.  urn:newsml:reuters.com:*:nL1N1EB12G 
    Yu Xin, an executive committee member of Nan Hai and chief 
executive officer of Dadi Cinema, told Reuters that the takeover 
will help Dadi better penetrate China's tier one and two mega 
cities, where City Entertainment operates and manages 76 cinemas 
with 531 screens.  
    "As Dadi's cinemas focus on smaller Chinese cities from 
tiers two to four, this deal will greatly supplement our current 
network in China, and further strengthen our market position," 
she said. 
    Dadi Cinema, which ran 350 cinemas with almost 2000 screens 
in the world's second-largest movie market as of the end of 
2016, will continue to acquire smaller cinema operators at home, 
Yu said. The company plans to acquire and build more than 200 
cinemas over the next three years. 
    Nan Hai expects to complete the deal by the middle of the 
year, according to Yu.  
    Nan Hai's shares were up more than 1 percent on Wednesday 
after the announcement, outpacing a flat overall market  .HSI .  
     
 ($1 = 6.8775 Chinese yuan renminbi) 
 
 (Reporting by Julie Zhu) 
 ((julie.zhu1@thomsonreuters.com; +852 2843 6519; Reuters 
Messaging: julie.zhu1.thomsonreuters.com@reuters.net)) 
 
Keywords: OSGH M&A/NAN HAI CORP