AMC Entertainment Holdings Inc.’s AMC -3.75% largest shareholder, China’s Dalian Wanda Group Co., has sold most of its shares in the movie-theater chain, according to a securities filing on Friday.
Wanda sold its stake over the past week. The theater chain’s shares have skyrocketed 160% in the past 12 months, buoyed by a Reddit-fueled frenzy that started with the videogame retailer GameStop Corp. GME 3.70% and bolstered the fortunes of other companies affected by the pandemic, including AMC. AMC -3.75%
In all, Wanda sold 30.4 million shares between May 13 through May 18 for roughly $426.9 million. Shares of AMC fell 3.8% Friday to $12.08 following news of the stock sale.
The filing didn’t provide a reason for the sale, and a Wanda representative was unavailable for comment.
AMC said in a release Friday that Lincoln Zhang, a Wanda official who serves as chairman of AMC’s board, and John Zeng, a Wanda executive and director, will resign from their board seats within the next 30 days.
Wanda’s stake in AMC goes back to 2012 when it first acquired AMC in a deal valued then at around $2.6 billion. Wanda took the company through a 2013 initial public offering and retained a majority of AMC’s shares.
“I salute Wanda for the immensely constructive role they played in building our company,” AMC Chief Executive Adam Aron said in prepared remarks Friday.
Wanda Film Group owns the largest movie-theater chain in China with some venues in Australia. It also produces Chinese-language films. AMC is the world’s largest movie-theater chain with about 950 theaters and 10,500 screens world-wide.
As coronavirus-related restrictions forced theater venues to close or significantly limit guest capacity, roiling the more than century’s old company, Wanda converted its Class B shares to Class A shares, reducing its voting power. AMC also issued 278 million new shares, which helped it raise $870 million but diluted Wanda’s stake.
Wanda also sold other AMC shares earlier in the year. Wanda now owns 10,000 of AMC’s Class A shares, or 0.002% of the total shares outstanding. No single entity holds an ownership stake above 10%, AMC said.
“With no controlling shareholder in place, now AMC will be governed just as is most other publicly traded companies, with a wide array of shareholders,” Mr. Aron said during a March earnings call.
As part of a long-term strategy agreement, some of Wanda’s films will be shown at select AMC theaters.
“This continuing communication between the two companies should create a win-win situation for both Wanda Film Group and for AMC in the cinema and film industries,” AMC said Friday.
Write to Kimberly Chin at [email protected]
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