Japan's Usen Corp. has announced the purchase of GagaCommunications, a leading independent film distributor.
Usen, a major supplier of broadband services in Japan, plansto acquire a 57.6% stake, amounting to $94.3m (Y10 billion) and operate Gaga asa subsidiary. It will invest the funds in two share issues that Gaga isplanning for the latter part of December 2004 and the first part of January2005.
Also, Tatsumi Yoda, the honorary chairman of Avex GroupHoldings will invest $28.3m (Y3 billion) in new Gaga shares, taking a 17.3%stake and becoming the company's second-largest shareholder. Gaga will thusgain a total of $122.6m (Y13 billion) in new investment, while issuing a totalof 15,330,000 new shares.
For the fiscal year ending September 2004 Gaga recorded aloss of $141.5m (Y15 billion) on its consolidated earnings, compared with aloss of $74m (Y7.9 billion) for the previous period. Among the causes for thepoor results were rising acquisition and P&A costs as well as declining TVsales.
Founded in 1964, Usen boasts the largest share of theJapanese cable broadcasting market. In 2001 it became the first in the world tooffer a commercial Internet access service via optical fibre cable. It hascapital and business ties with Sony Communications Network Corporation,supplying the cable infrastructure for Sony's So-net Internet provider service,and SKY Perfect Communications, a cable and satellite broadcaster.
Founded in 1986 by entrepreneur Tetsu Fujimura, Gaga hassince became a major film distributor, handling everything from Asian art filmsto Hollywood A product, including Chicago,Kill Bill, Hannibal, End Of Days and TheGreen Mile.