Chinese tycoon buys Australasian Hoyts circuit
A Chinese property tycoon, Sun Xishuang, purchased the Australasian cinema chain Hoyts Group for a reported A$900 million at the end of 2014. Hoyts’ owners, the private-equity firm Pacific Equity Partners, were reportedly looking at floating Hoyts on the local stock market in the second half of last year, but these plans went quiet towards the end of the year.
Sun bought Hoyts through ID Leisure Ventures, a British Virgin Islands-based investment company. ID Leisure seems content to retain the current Hoyts management of chairman David Kirke and chief executive Damien Keogh. Keogh said, "We look forward to the investment and development of Hoyts going forward under the ownership of a new investor, ID Leisure."
Pacific Equity Partners bought Hoyts in 2007 from West Australian Newspapers and PBL, headed by James Packer, at a price reported to be A$440 million. The change in price reflects Hoyts profit moves, which have increased from A$48 million in 2007 to A$86 million last year.
Sun Xishuang has links to Dalian Wanda and Wang Jianlin, who purchased AMC Theatres last year. Sun has a substantial stake in Wanda Commercial Properties and is involved in building resorts at China's Changbai Mountain with Wanda. At one stage it was thought that Wang Jianlin was interested in Hoyts.
Hoyts was founded in 1926. It operates around 400 screens in 43 cinemas across Australia and New Zealand. The chain is Australia's second-largest with more than 75,000 seats.
The New Zealand arm of Event Cinemas Australia (Greater Union) has just purchased two cinemas in the Bay of Plenty from independent operator Paul Desmond. Desmond and his wife set up the Tauranga Cinema 21 years ago and started a second cinema at Mount Manganui in 2000. The Tauranga complex has eight screens and 730 seats, while Mount Manganui has four screens and 570 seats. Event Cinemas New Zealand currently has 12 cinemas in the North Island of New Zealand and this will bring their chain to 14 cinemas.
Carmen Switzer, general manager of operations for Event Cinemas NZ, said that they had been keen to buy the business for some time. She will retain the current team. "There will be no staff changes. They have a fantastic team and that was one of the reasons why we wanted to acquire the business—it's extremely well run." She added that they will introduce the Event brand over time.
The Hobbit spurred one small New Zealand cinema to update to digital. Picton Cinemas, in the small tourist town of Picton at the top of the South Island, has just converted one of its three screens to digital. It did so in time to run The Hobbit: The Battle of the Five Armies in December. Conversion of the other two screens is hoped to occur this year. Prior to the conversion, the cinema had been mainly playing art-house films on an e-cinema system.
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