Hong Kong's eSun Holdings is increasing its stake in local film producer and distributor Media Asia Holdings and is also reportedly in informal talks to acquire an interest in rival film studio, Golden Harvest Entertainment.
eSun is spending $6.4m (HK$50m) to raise its stake in Media Asia from 35.13% to 49.77% because of the film company's "positive business prospects". Media Asia scored a huge hit last year with crime thriller Infernal Affairs - which out-grossed Harry Potter And The Chamber Of Secrets and Spider-Man - and is producing two sequels to the film back-to-back.
eSun also issued a legal notice on Friday following press reports that it is in informal talks to swap its Media Asia stake for a stake in Golden Harvest. The hotels to media group said it had discussed co-operation with Golden Harvest several times over the past few years including "the showing of films produced by Media Asia at Golden Harvest cinemas and co-production of films."
The notice continued: "During the course of these discussions, the possibility of injection of the company's interest in Media Asia in exchange of certain interest in Golden Harvest has also been considered."
However, eSun said the talks are very preliminary and no agreement has been reached.
Acquisitive mainland media company, Stellar Megamedia Co, is also reportedly in talks to buy a stake in Golden Harvest. The two-year-old company recently bought a 70% stake in satellite channel Sun TV, owned by Hong Kong's Sun Media Group, and is the second largest shareholder in Hong Kong multimedia company Star East Holdings.