(CBN - Global) May 17 -- Leshi Internet Information & Technology Corp. [SHE:300104], whose shares have been suspended for months, has finally published its plan to buy all of unit Le Vision Pictures. Many celebrity shareholders, including world-renowned film director Mr. Zhang Yimou, have seen their fortunes soar overnight.
Leshi Internet, which trades under the name LeEco, plans to acquire 100 percent of Le Vision Pictures for no more than CNY9.8 billion (USD1.5 billion) in a combined cash-and-shares deal, the Shenzhen-listed company said in a statement. LeEco said its shares will resume trading once details of the plan are disclosed and approved by the Shenzhen Stock Exchange. The deal ends a previous plan to publicly list the company.
LeEco will control half of China's film and television industry if the acquisition is completed. Le Vision Pictures currently had 43 shareholders, including Mr. Zhang, 18 movie stars and core members of LeEco-affiliated companies.
After the acquisition, the value of Mr. Zhang's 1.44 percent stake in Le Vision Pictures will be worth CNY140 million based on LeEco's share price of CNY58.77 when its shares were suspended. That implies an almost 80-fold gain in two years.
Set up in 2011, Le Vision Pictures is an affiliated company of LeEco, both of which are controlled by Chief Executive Jia Yueting. LeEco announced its intention to restructure Le Vision Pictures in 2014. LeEco is in the process of building an online ecosystem, a platform with content, devices and applications. The Beijing-based company is also expanding into the Internet-linked smart electric vehicle market.
The restructuring will adopt a valuation adjustment mechanism, the statement said. Companies including LeTV Holdings promise that net profit of the target company will be no less than CNY520 million, CNY730 million and CNY1.04 billion in 2016, 2017 and 2018, respectively. Net profit at Le Vision Pictures attributable to shareholders of the parent company was negative in both 2014 and 2015, reaching CNY890 million and CNY100 million respectively.