STX Entertainment Chief Hints At Possible Hong Kong IPO
Will STX Entertainment go public on the Hong Kong Stock Exchange? There’s nothing official yet, but the company has been hinting that it might for the past year as Deadline has reported in past stories. Now, CEO Robert Simonds told the South China Morning Post that it’s a possibility as he completes plans to open an office in the Chinese city.
“The business itself is sustaining, and the last round of financing gave us the capital we needed to expand all the other businesses besides movies,” he told the publication. He declined to say how much he’d want to raise in an IPO, or how quickly he’d like to move.
But he did note that his studio spent between $600 million-$1 billion this year on movies “and plans to expend at least that amount or more in the sector next year,” equal to about half of its budget with the rest devoted to TV, streaming and virtual reality.
He calls Wanda Group’s recent $3.5 billion acquisition of Legendary Entertainment “a very smart deal. We are also making money for our partners. But I am convinced that a lot of other U.S.-China transactions are not going to end up well for Chinese partners in terms of financial return, although some investors didn’t invest for financial reasons.”
Chinese company Tencent and Hong Kong telecom giant PCCW bought equity in STX in its last funding round, in August. It was expected to use the cash to build its TV and international operations, digital platforms, and other kinds of entertainment including virtual reality.
“All of these investments, combined with an increase to our credit facility – led by J. P. Morgan and Bank of America – have provided us with access to almost $700 million in new capital,” Simonds told staffers at the time.
Productions from the company, founded in 2014, include just-released The Edge Of Seventeen, and upcoming films The Space Between Us and The Bye Bye Man.
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