Legendary East Gets $220.5 Million for China Movie Venture

HONG KONG/LOS ANGELES: Paul Y. Engineering Group is set to acquire a 50-percent interest in Legendary East, the Hong Kong-based venture launched by Legendary Entertainment, for $220.5 million.

Legendary East was established this summer as the Asian arm of Legendary Pictures, with a focus on developing and producing English-language films that tap into Legendary’s Chinese ties. The company is led by Thomas Tull, Legendary Entertainment’s chairman and CEO, who created the venture with entrepreneur Kelvin Wu. Legendary East initially plans on producing one to two major, event-style films per year for worldwide audiences, starting in 2013.

Upon closing of the deal Legendary will retain 40-percent ownership in the joint venture, and Huayi Brothers International will have 9 percent. AID Partners, a new investor, will take an undisclosed share for a $35 million investment.

Tull commented, “We are very pleased that PYE has committed to Legendary East. This is another important milestone following the recent announcement of Legendary East’s formation. We share a common vision with PYE—that with China’s rapid economic growth and rich cultural background, this is a filmmaking marketplace on the rise. We are committed to China and the surrounding region for the long run, and to producing entertainment that is globally appealing in quality, scale and impact.”

Tom Lau, the deputy chairman of PYE, said, “This proposal to invest in Legendary East is not only highly value accretive to the PYE shareholders, it also offers an attractive opportunity to diversify and refocus PYE’s business activities to take advantage of the lucrative potential of the filmmaking business in China. We believe that the combination of Legendary’s world-class experience in film production, and Huayi Brothers’ local production and distribution capabilities in China, represents a very strong opportunity for PYE’s future growth.”

Kelvin Wu, principal partner of AID Partners who will become Legendary East’s CEO, added, “AID Partners will be investing US$35 million in Legendary East via PYE, demonstrating our tremendous confidence in this venture and in the opportunities for Legendary East to deliver large scale, world-class films out of the Greater China region. With the combined support of Legendary Entertainment and its highly successful business model, and the rapid growth of the Chinese film market, we are excited to be in Hong Kong and to contribute to its momentum to regain its status as the Hollywood of the East.”