Bottom line: Pony Ma’s big charitable donation reflects some restlessness with his Tencent empire, while Robin Li’s potential pursuit of the AC Milan soccer club reflects a recent interest by Chinese billionaires in sports club ownership.
Robin Li chasing AC Milan?
Two of China’s richest Internet entrepreneurs are in the headlines today for their personal spending, led by a huge gift from Tencent (HKEx: 700) chief Pony Ma as he follows many of his western peers into philanthropy. Meantime, Baidu (Nasdaq: BIDU) chief Robin Li may also be following several of his Chinese peers into the realm of sports team ownership, with word that he may be one of the leaders of a group aiming to buy Italian soccer club AC Milan.
Neither of these stories will have much impact on Tencent or Baidu, since both involve each companies’ founder engaging in personal interests. But they do provide some insight into the personalities of these multi-billionaires, who still make most or all of the major decisions about their companies. Read Full Post…
Bottom line: A flurry of new de-listing activity shows that well-funded privatizations will continue despite market volatility in China, and could also spread to undervalued private companies listed in Hong Kong.
Wanda Commercial Properties eyes buyout
The headlines are brimming with new moves in the buyout wave that has swept over off-shore listed Chinese stocks, which are privatizing in droves due to disappointing valuations. Leading the news are 2 former high-flyers, online video site Youku Tudou (NYSE: YOKU), which has formally completed its buyout by e-commerce giant Alibaba (NYSE: BABA); and property giant Wanda Commercial Properties (HKEx: 3699), which has announced it is exploring a potential buyout less than 2 years after its Hong Kong IPO.
That pair are joined by 2 smaller stories involving ongoing privatizations by budget hotel operator Homeinns (Nasdaq: HMIN) and the shriveling Ku6 Media (Nasdaq: KUTV). Media are saying that Homeinns has already lined up a Chinese listing vehicle to resume its life as a publicly traded company after it de-lists from New York. And Ku6 has announced it has formally signed a buyout agreement that will result in its own de-listing. Read Full Post…
Bottom line: Wanda’s new FIFA sponsorship is an opportunistic and savvy move both politically and financially, while CMC’s new smaller soccer investment also looks like a good play to win goodwill from Beijing.
Wanda, CMC in new soccer plays
China’s recent fascination with global sports deals continues, with word of major new tie-ups involving 2 big fans of President Xi Jinping’s recent call to improve the nation’s poor performance in soccer. The larger deal has an opportunistic Wanda Group signing on as China’s first top-tier sponsor of FIFA, the world soccer body whose reputation has suffered lately due to a major corruption scandal. The second deal has the acquisitive China Media Capital (CMC) investing in in SoccerWorld, a British operator of sports stadiums.
Both deals have a strongly political element, since Chinese President Xi Jinping is personally a big soccer fan and has appealed to China’s private sector to help improve the nation’s performance at the world’s most popular sport. Some of China’s other top corporate leaders have also answered that call, including Alibaba (NYSE: BABA) founder Jack Ma, leading web portal Sina (Nasdaq: SINA) and electronics retailing giant Suning (Shenzhen: 002024). Read Full Post…
Bottom line: Wanda Group founder Wang Jianlin and other major Chinese entrepreneurs intent on building wide-ranging conglomerates should look to the western failure of such firms instead focus on their core business areas.
Wanda’s Wang buys Carmike Cinemas
Billionaire deal maker Wang Jianlin was back in the acquisition headlines last week, when his increasingly diverse Wanda empire announced it would buy US-based Carmike Cinemas (Nasdaq: CKEC) as part of it its dream of building the world’s biggest theater chain operator. But theaters are just one of a growing number of items on Wanda’s recent list of mega-projects, which has also included plans for a multibillion-dollar European theme park, a major e-commerce venture, and investments related to sports and its core real estate products and services.
The sudden diversification looks similar to ones by other cash-rich Chinese companies, most notably e-commerce giant Alibaba(NYSE: BABA), and reflects a desire to move beyond their original businesses into new growth areas. While such a strategy seems logical, western experience has shown that such rapid diversification more often results in dysfunction rather than synergies, and frequently ends with the eventual break-up of such companies into smaller units focused on individual areas of expertise. Read Full Post…
Bottom line: Wanda Group’s newly announced 3 billion euro Paris theme park is the latest in a string of its massive new investments, many of which are likely to collapse or get sharply scaled back due to lack of resources.
Chinese billionaire Wang Jianlin to builld Paris theme park
Billionaire real estate tycoon Wang Jianlin is growing fond of the “b” word these days, with yet another announcement of a multibillion-dollar investment. This time the Wanda Group chief is announcing plans for a $3.3 billion theme park in Paris that would rival the existing nearby resort owned by Disney (NYSE: DIS), which just happens to be revving up to launch its own first theme park on Wanda’s home turf in China.
If I sound just a little skeptical, it’s because I’m growing increasingly suspicious that Wang has become addicted to making big announcements that may never get completed. This particular deal comes less than 2 months after Wang said he would buy Hollywood film studio Legendary Entertainment for $3.5 billion. (previous post) Many are also guessing that Wang may bid aggressively for a strategic stake worth $1 billion or more in Hollywood major Paramount Pictures, which announced just last week it is looking for such a partner. (previous post) Read Full Post…
Bottom line: Billionaire Guo Guangchang’s new sporting venture reflects his desire to move into entertainment, and also to win goodwill by supporting Beijing’s initiative to build up Chinese athletics.
Fosun’s Guo in sports tie-up with Europe’s GestiFute
After his brief and somewhat ominous disappearance last month, the man once called China’s Warren Buffett is back in the headlines, with word that Guo Guangchang has joined the growing ranks of Chinese billionaires making major investments in sports. In this case Guo is teaming up with Portuguese “super broker” GestiFute, whose main business is engineering the deals that allow European players to move from one soccer club to another. Among its deals, GestiFute was involved in previous transfers involving superstar Cristiano Ronaldo, showing the company is itself a major player in the business.
This particular deal is just the latest by some of China’s richest men and biggest private companies, which have suddenly discovered a huge appetite for all things sports. Previous investors in the growing trend include Alibaba (NYSE: BABA) founder Jack Ma and Wanda Group chief Wang Jianlin, who are 2 of the country’s wealthiest individuals. They also have been joined by a growing number of entertainment-related companies like online video firm LeTV(Shenzhen: 300104) and electronics retailer Suning (Shenzhen: 002024), which also owns a major online video site. Read Full Post…
Bottom line: CMC’s purchase of a stake in the parent of the Manchester City soccer club looks at least partly political, and could be followed by similar purchases by Alibaba or LeTV next year as companies try to earn goodwill from Beijing.
CMC buys into global soccer
Anyone who thought the entrepreneurial China Media Capital (CMC) might represent a new breed of market-oriented Chinese investors will be disappointed to learn the company’s latest purchase looks quite political and aimed at pleasing Beijing. That investment has the Shanghai-based CMC teaming up with the financial giant Citic Group, another highly political animal, to buy 13 percent of a company whose prize asset is the Manchester City soccer club.
I’m probably being slightly unfair in calling this move purely political, since China is certainly a soccer-crazy country that could benefit from the expertise that CMC will get through its investment in City Football Group (CFG). But the timing of this deal looks quite suspicious, as it comes just weeks after Chinese President Xi Jinping visited the team during a tour of Britain, where he released a plan to turn China into a soccer powerhouse. Read Full Post…
Bottom line: Xiaomi’s and Wanda’s moves into financial services look logical but a bit late, and could struggle to compete with earlier initiatives from the likes of Alibaba, Tencent and Baidu.
Xiaomi joins partners in new bank plan
With just about all the major Internet players moving into financial services, it’s been somewhat surprising that smartphone sensation Xiaomi hasn’t joined the trend yet. The same can be said for Wanda Group, which is moving beyond its traditional strength in real estate with plans for a major e-commerce venture and plays in the entertainment space.
That looks set to change soon, however, with separate reports saying both Xiaomi and Wanda are planning moves into China’s financial sector that is being opened to private money after years of domination by big state-owned companies. Xiaomi’s move comes in an announcement from an obscure company called Hebang Corp (Shanghai: 603077), which says the pair are part of a group that plans to open a privately funded bank. Meantime, Wanda’s plan comes in a report citing company chief Wang Jianlin saying he is planning to make some major purchases in the financial services arena. Read Full Post…
Shanghai may be famous for its entrepreneurial spirit, but its track record isn’t quite so stellar when it comes to nurturing top entrepreneurs. That could be starting to change, however, with word that Dalian Wanda Group, one of China’s most dynamic companies, plans to move its headquarters to Shanghai from its current location in Beijing.
As a longtime foreigner living in Shanghai, I’ve always been surprised by the relatively small number of major private companies for a city of our size. We should certainly be proud of some of our city’s most outstanding entrepreneurs, with names like Guo Guangchang of Fosun Group and Spring Airlines (Shenzhen: 601021) Chairman Wang Zhenghua as 2 outstanding examples. Read Full Post…
Bottom line: The latest sporting deals by LeTV, Wanda and Alibaba reflect a growing scramble to secure broadcast rights and develop sports channels in China, with more such deals likely in the year ahead.
Alibaba wins NCAA rights for China
A nascent but growing move by China’s top private companies into global sports is in 2 separate headlines, with word of significant new deals involving e-commerce giant Alibaba (NYSE: BABA) and video superstar LeTV (Shenzhen: 300104). The stories also involve the entertainment ambitions of real estate magnate Wang Jianlin, one of China’s richest men, whose Wanda Group has been at the center of 2 major global sports deals over the past year.
The first of the newest deals will see Alibaba bring US college basketball to China through a deal with the National Collegiate Athletic Association (NCAA), the main governing body for US college sports. The other deal has seen LeTV, China’s most valuable provider of Internet video services, raise 800 million yuan ($130 million) for its young sports division. One of the main backers in that new funding round was Wang Jianlin’s son, Wang Shicong. Read Full Post…
Bottom line: 3 new $100 million fundings reflect the recent popularity for Chinese tech and media start-ups among investors, pushing valuations up to unrealistic levels for these young companies that operate in mostly niche areas.
E Daijia wins big new funding
I can remember a time not long ago when $100 million seemed like a huge figure for start-ups raising new funds, and such amounts were quite infrequent. But in today’s overheated Chinese tech world, that figure is in 3 separate headlines this week, including 2 involving the hot area of location-based services (LBS). That pair of items has ride-sharing app Dida Pinche and mobile chauffeur app E Daijia each reaching the coveted $100 million mark in their third and fourth funding rounds, respectively. Meantime, the new sports unit of fast-rising video superstar LeTV (Shenzhen: 300104) has also just won its own $100 million in new funding, reportedly from one of China’s richest men. Read Full Post…
