Chinese billionaire Wang Jianlin is locked in a takeover battle that involves some real life elbow strikes and spinning back kicks as China’s richest man is reportedly bidding against US alternative investment giant the Blackstone Group, and two other companies to acquire the owner of the UFC mixed-martial contests for as much as $4 billion.
The takeover battle for the martial arts promotion business was reported by ESPN as pitting Wang’s Dalian Wanda Group against Blackstone, US sports marketing group WME/IMG and Shanghai-based China Media Capital, although the UFC’s current owners have refuted any possibility of a sale.
As China’s real estate market slows down, Wang is attempting to transform his mainland real estate empire into a multinational entertainment conglomerate, and has already acquired the company responsible for the Ironman triathlon series, as well as a football marketing firm and a chunk of Spanish soccer team Atletico Madrid.
Goldman Sachs Shopping Fast Growing Fight Club
“As a private company, we don’t discuss speculation or rumors related to our business,” ESPN quoted UFC vice president Dave Sholler, as saying when asked about the reported sale of the fight business.
However, the US network went on to reveal that UFC’s parent firm Zuffa LLC has hired investment banking giant Goldman Sachs to represent it in a possible sale of the sports business, and talks on a potential deal have already reached advanced stages, according to ESPN’s sources.
The winning bid will need to value the business at $3.5 to $4 billion according to sources familiar with the deal, with UFC earnings before interest, taxes, depreciation and amortization reaching $200 to $250 miliion per year, and a lucrative new TV contract set to start in 2019.
Wanda May Have UFC Deal in a Chokehold
Wanda, which bought the Ironman business in August last year for $650 million, is said by ESPN to be the leading bidder for the UFC fight empire.
Sports has become a major area of acquisition for Wanda in the last two years, as part of an overall strategy of diversifying into the entertainment sector as China’s newly wealthy population looks for ways to spend its extra cash.
In March of this year, Wanda became the first Chinese company to sign up as an official partner of the FIFA football federation, after Wang bought a Swiss sports marketing firm belonging to the nephew of former FIFA president Sepp Blatter last year for $1.19 billion.
In January of 2015, Wanda first made its mark in the soccer world by investing $48 million to acquire a 20 percent stake in Spanish football club Atletico Madrid.
The company’s sports strategy fits into an interest in entertainment deals that also saw Wanda purchase US movie production house Legendary Entertainment this year for a reported $3.5 billion.
While Wanda has been working in recent weeks to migrate its stock listing from Hong Kong to a mainland exchange, in hopes of improving its valuation, a Reuters report today indicated that recent Chinese regulatory moves might cause the company to call off the high risk transaction.