By Park Ji-won
A Chinese consortium has signed a contract to buy Korea’s No. 3 multiplex cinema operator Megabox, according to reports Thursday.
Megabox is 50 percent owned by Korea Multiplex Investment, a private investment body led by Macquarie Funds and a group of investors.
JContentree Corp., a media group, also holds a 46.3 percent stake in the multiplex cinema operator, with other minor investors holding the remaining shares.
Among the shareholders of Korea Multiplex Investment are the National Pension Service, Public Officials Benefit Association and Military Mutual Aid Association.
Korea Multiplex Investment and other stake holders signed a stock purchase agreement (SPA) with a Chinese investment fund consortium, Oriental Star Capital, to sell its entire stake in Megabox for 570 billion won ($517.1 million).
The Chinese company is seeking to buy the Korean movie theater company to make a foray into the Korean entertainment market. It has been investing in media companies in recent years mainly in China.
However, the Chinese firm is not the only bidder. The Korean media group JContentree also can buy the movie theater because it has the tag-along and drag-along rights. With these, it can sell off its 46 percent stake or buy 100 percent of the shares if the company can pay the same amount of money that the Chinese company offered within 30 days.
Megabox has a 20 percent market share after CJ CGV with 42.2 percent and Lotte Cinema with 31.1 percent. It merged with a movie theater company Cinus in 2011 and became the No.3 provider.