Concerned about high valuations of some recent public company-led deals, the exchange required Wanda Cinema Line to disclose the reasons behind the high valuation of the asset.
Identities of the investors participating in the deal and the operating conditions of Legendary Entertainment, a U.S. movie studio acquired by Wanda in January for US$3.5 billion and part of Wanda Media, are also part of the exchange's questions.
On May 12, Wanda Cinema Line revealed plans that it would issue new shares to 33 entities in exchange of acquiring the 100% interest in Wanda Media for approximately US$5.72 billion.
The Shenzhen Stock Exchange required Wanda Cinema to disclose the legal representatives, source of capital and partner identity of the 30 or so entities participating in the acquisition.
One central issue is that if the complete list of investors in the deal exceeds 200, Wanda Cinema would be required to meet additional criteria for conducting the transaction.
Wang Jianlin, chairman of the parent company Dalian Wanda Group, has plans to list the Wanda Media unit, as the parent company is in the middle of a US$4 billion privatization deal of its property unit in Hong Kong.
Earlier this year, Wanda Pictures, part of Wanda Media, was reportedly seeking to raise US$1.5 billion from Chinese investors at a US$5.3 billion valuation.
The Shenzhen Stock Exchange made similar inquiries on Leshi Internet Information & Technology Corp.'s plans to acquire its film production and distribution unit Le Vision Pictures, Ltd. for RMB9.8 billion (US$1.51 billion) earlier this month.
Leshi, also known as LeEco, originally planned to list its film unit separately.
Source: China Money Network by Nina Xiang