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January 5, 2018

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Wanda eyes IPO for sport unit, and assets sale

China’s Dalian Wanda Group is considering a Hong Kong listing for its sports assets as part of efforts to rationalize its portfolio that could also include other sales, according to five people familiar with the situation.

The conglomerate last month tapped investment banks for a potential initial public offering of its sports businesses, three of the sources said. CITIC Securities, China’s largest brokerage, is one of the banks involved, added one of them.

A spokesman for CITIC Securities declined to comment.

Wanda’s businesses range from real estate to football and cinemas but it has been rattled in the past year by a government-led crackdown on overseas deals and high leverage. The company is owned by Wang Jianlin, one of China’s richest men.

An IPO of Wanda’s sports assets would include Infront Sports & Media AG, a Swiss sports marketing company, and World Triathlon Corp, the organizer and promoter of the Ironman race, according to three of the people.

The two were acquired in 2015 for US$1.2 billion and US$650 million respectively.

The share offering would also include Wanda’s smaller sports assets in China, such as cycling and basketball leagues, one of them said. The public float would not involve Wanda’s 20 percent stake in the Spanish football club Atletico Madrid, valued at 67 million euros (US$81 million) after a recent capital raise, the source said.

The IPO would most likely take place in Hong Kong, but bankers have also pitched for a US listing, according to the people.

Wanda is separately looking to sell Sunseeker International, a British yacht maker it bought in 2013 for US$495 million but whose financial performance it has failed to turn around, two other people said.

Wanda declined to comment. The people could not be named as the plans are confidential.

Wanda’s interest in property, sports and entertainment — accounting for over US$13 billion of its deals in the past five years — ran into official opposition last year when Beijing labeled overseas deals in those areas “irrational.”

In addition to sports, its holdings also include the cinema chain AMC Entertainment Holdings and movie studio Legendary Entertainment.

The company is also considering the merits of a pre-IPO funding round for the sports unit, according to one of the people. All plans are still at an early stage however as Wanda is seeking a chief financial officer for the sports business to lead the fundraising efforts, said another of the people.

Property forms the basis of the Wanda empire — its mixed use Wanda Plaza developments are common across China.

Last year, Wanda sold a portfolio of hotels and tourism assets, including 13 theme parks, for US$9 billion to Guangzhou R&F Properties and Sunac China. Five flagship overseas developments — in London, Chicago, Los Angeles, Sydney and Australia’s Gold Coast — are also for sale, said one source.


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