MDP Worldwide Entertainment,the LA-based financier/distributor run by Mark Damon and publicly traded on theMontreal Stock Exchange, has closed a deal in principle with Music BoxEntertainment Ltd whereby Music Box will make a $17.5m equity investment in MDP.Music Box is a new company to be owned by Hong Kong-based entrepreneurs DrHenry Cheng Kar-Shun and Sammy S Lee
The deal completesnegotiations between MDP and pop legend Michael Jackson, who struck a dealearlier this year for he and partner Raju Sharad Patel to invest in MDP andproduce movies with it. Jackson and Patel now become principals in a newlyformed film company which will have a first-look deal with MDP, and which willbe financed by Music Box. The new company will have access to its own developmentfunds, while Jackson and Patel will together have a significant ownership stakein Music Box's MDP stake.
Under the terms of theagreement, Music Box will subscribe to 260,228,365 convertible preferred sharesof MDP - representing 62% of the total issued and outstanding shares ofthe company.
"This sizeable equityinfusion will significantly expand the Company's capital base and enableit to increase its bank lines of credit, which should help us to realize thepotential of our impressive slate of upcoming films," said Damon in astatement. "We expect that the closing of this transaction should have anaccretive impact on shareholder value."
The Cheng family is one ofthe richest in the world, owning some of the world's finest hotelsincluding the Regent Beverly Wilshire in Beverly Hills, the Grand Hyatt in HongKong and the 75-hotel Renaissance Group, the Chow Tai Fook chain of 80 jewelrystores in Asia and its own manufacturing plant in Singapore. Cheng himself ismanaging director of New World Development Company which has assets exceeding$15bn in property, infrastructure and telecommunications.
Lee has been administeringthe Cheng family's global interests for years and was most recentlyfocused on the family's co-venture with Donald Trump, Trump Place in NewYork City as well as The Knightsbridge development in London and therefurbishment of the Renaissance Chancery Court Hotel in London. He will beappointed vice chairman of MDP on closing of the transaction.
Among the films which Pateland Jackson are working on include gothic werewolf drama Wolfed based on a story by Alexandre Dumas and a new liveaction film of Tom Thumb.
MDP meanwhile has a fullslate of projects in production or development including The SixteenPleasures with Nicole Kidman, TheI Inside with Ryan Phillippe, Roustabout with Winona Ryder, Gus Van Sant's The LastDays, Barbara Kopple's Havoc written by Stephen Gaghan and The United StatesOf Leland produced by andco-starring Kevin Spacey.
The transaction wasnegotiated by Stewart Hall, Malcolm Reeve, and Harris Tulchin on behalf ofMusic Box; by Bruce Vann and Joseph Cohen on behalfof the Jackson-Patel co-venture; by Phil Davis on behalf of Michael Jackson; byPeter Dekom and Larry Mortorff on behalf of Raju Patel; and by MichaelEliasberg on behalf of MDP.