Just last month, it was announced that mm2 Asia Ltd has entered into an agreement to acquire 50 per cent of the Golden Village (GV) Cinema business in Singapore for S$184.25 million from Village Cinemas Australia Pty Ltd.
Golden Village is Singapore’s largest cinema chain with 92 screens across 11 cineplexes, with a 12th to open in Paya Lebar later this year.
It is reported to command about 42% of box-office revenue here.
Fast forward to today (24 Jul) – the Singapore-based media company announced that this acquisition bid of the GV cinema chain in Singapore has fallen through after the owner of the other half-share in the business did not approve it.
On June 13, it had signed a conditional sale and purchase agreement with Village Cinemas Australia Pty Ltd to buy the latter’s 50% stake in Hong Kong-incorporated Dartina Development Ltd, which holds the Golden Village cinema business in Singapore.
One of the conditions of the deal was to secure the approval of Golden Screen, the entity that holds the remaining 50% in Dartina, by July 21.
That approval was not obtained, hence the acquisition failed to take place.
mm2 Asia said in its pre-market exchange filing that it was currently in discussions with Village Cinemas Australia on their available options.
MM2 Slowly Dominating The Cinema Business
This move is not a new one for mm2 Asia, which made a similar move in Malaysia recently, acquiring the cinema management and operations business of Lotus Fivestar Cinemas for 13 cinema locations.
This was for a purchase consideration of RM118 million (S$37.5 million).
Meanwhile in 2015, it also completed the acquisition of Cathay Cineplexes business operations at two locations in Malaysia for RM40 million (S$13.8 million). The acquisition was done through the company’s wholly owned subsidiary, mm2 Screen Management.
Mm2’s talks to acquire Golden Village came soon after mm2 announced that it will be co-producing five films with media conglomerate Turner Asia Pacific over the next three years.
According to a press release, the films will be produced with a “multi-million dollar budget”.
Under the new deal, the partners’ first release will be Wonder Boy, a biopic starring popular singer Benjamin Kheng in the role of singer-songwriter Dick Lee. Directed by Lee and Daniel Yam, the film is slated for release in August.
Two other family-oriented films and two films by local box-office king Jack Neo are also in the works under the new deal.
mm2 was formed in Malaysia in 2008 and is now headquartered in Singapore.
In December 2014, it made history by becoming the first – and thus far only – local movie production company to be listed on Catalist, the secondary board of the Singapore Exchange.
Following the supposed completion of mm2 Asia’s new share placement, the company’s total number of shares will increase to 1.07 billion from 1.05 billion, with its paid-up share capital growing to S$103.2 million from S$88.2 million before completion.
Besides the financial setback, will this pose any other issues for the company? We’ll just have to wait and see how the company holds up in the next few months.
Featured Image Credit: City Square Mall