Hoyts Group bought by Chinese former government official and property magnate.

WEDNESDAY 24 DECEMBER, 2014

Hoyts Group bought by Chinese former

government official and property magnate.

 

Sun Xishuang, the new owner of Hoyts. 

Hoyts has been happily adapting and maximising profits in Australia’s multiplexes while its ownership has bobbed around like a ping pong ball in a storm drain.

 The longer history is fascinating, starting with this wonderful wikiquote: ‘At the start of the 20th century dentist Dr Arthur Russell, who was, in his spare time, a cornet player and a magician, purchased a share in a small American travelling circus, known as Hoyts Circus, and travelled with them as the resident magician. After a financially disastrous run, Russell returned to his work as a dentist.

‘Undeterred, he leased the old St. Georges Hall in Bourke St Melbourne, (later known as the Hoyts Esquire), and began showing short films on Saturday nights.’

By 1932, Hoyts was owned by The Fox Film Corporation, to join the long, slow process by which Australian production was squeezed out of Australian cinemas by foreign owners.  That sentence, of course, conceals a much more complex story.

It came back into Australian hands in 1982, and was soon bought by the Fink family, who expanded, and put bits on the stock exchange, until the whole company was bought by the Packer’s Consolidated Press Holdings for  $750m.

After selling foreign pieces, the Packer family sold it to PBL and West Australian Newspapers in 2004, who sold it again in 2007 to Pacific Equity Partners, a private equity group based in Sydney.  That was never going to be a long term home. After doubling earnings before EDITBA from $48m to $86m and borrowing US$450m in 2013 to consolidate debt and pay a dividend to shareholders – who had hung on through the Global Financial Crisis -  PEP developed plans to relaunch Hoyts on the stock exchange, while divesting itself of $3.5b in holdings over the last year.  However, a single mystery buyer came a-nibbling at Hoyts’s toes, and has now bought the whole body for a deal which is said to be around $900m.

The existing management under CEO Damian Keogh and chair David Kirk will remain, and expect to plough on with their premium experience strategy.   

The new owner is China business heavyweight Sun Xishuang, through his investment company ID Leisure Ventures based in the British Virgin Islands.  Sun Xishuang is a property developer through the Dalian Yifang Group and Dalian Wanda Commercial Properties,  ‘majority owned by Wang Jianlin, China’s second richest man’ according to the Financial Times. 

It points out that  this deal ‘underlines mainland interest in expanding into entertainment overseas.’

Wang Jianlin – not Sun Xishuang – has bought AMC Entertainment, known as  the second largest theatre chain in the US and rather larger than Hoyts, the second largest theatre chain in Australia.  The combo is intriguing.

--------

David Kirk by the way left Pacific Media Partners in 2005 to became CEO of Fairfax Media, but resigned three years later. The Sydney Morning Herald misspelt his name in today’s story. 

And the original cinema and vaudeville hall at 238 Bourke Street became Hoyts De Luxe, designed by William Pitt, and finished after a year of construction in 1915. It is  now underneath Target at the Centrepoint Shopping Centre. The facade is still intact and there is agitation to remove the naff modern overlay.

No 236 was the Theatre Royal.