Eldridge Industries, the production company’s owner, said it terminated the deal after Beijing-based Wanda “failed to honor its contractual obligations.”
The Dick Clark deal is among the most high-profile to break down amid a broad Chinese government crackdown on money leaving the country. China’s shopping spree in Hollywood has stalled in the face of the currency crackdown and anti-China rhetoric in Washington.
Beijing’s scrutiny of overseas investments, stemming from fear that too much capital flight could weaken the yuan, also killed takeover talks between several Chinese companies and Metro-Goldwyn-Mayer Studios late last year.
Wanda declined to comment on Friday.
Wanda, a real-estate conglomerate aggressively expanding into media, announced its Dick Clark acquisition in November, touting it as the company’s first foray into television. Dick Clark produces several awards shows, including the Golden Globes and the American Music Awards.
Eldridge said it has asked the Delaware Chancery Court to force the release of escrowed funds owed to the company as a result of the termination of the Dick Clark deal. The amount in escrow is $25 million, according to a person familiar with the matter. Wanda has already paid Eldridge an initial $25 million from escrow, this person added.
Mr. Wang has been known around Hollywood for his big appetite and big price tags. The $1 billion Dick Clark deal raised eyebrows in the entertainment industry, since the production company had been recently valued by potential suitors at hundreds of millions of dollars less.
Source: Wall Street Journal by Erich Schwartzel
