Japanese media and communications conglomerate Usen has announced that it’s in talks to divest its interests in film distribution subsidiary Gaga Communications.
Under a management buyout deal currently being negotiated, Usen will divest both its own 58.3% holdings in Gaga and the remaining 41.7% held by Usen-owned subsidiary Almex Inc, a hotel real estate developer.
Gaga CEO and Usen executive advisor Tatsumi “Tom” Yoda’s own T.Y. Limited and real estate company Kinoshita Group have been granted rights to make the first offer in initial negotiations scheduled from May 12 to June 23.
A veteran distributor of Hollywood films, Gaga Communications halted production and acquisitions last year but continues to distribute titles for other companies which employ Gaga for its marketing strength and established network. The company currently has two films in Japan’s top ten box office chart with Slumdog Millionaire and Burn After Reading (co-distributed with Nikkatsu).
While this strategy has returned Gaga to profitability, Usen cited volatile market conditions in the film world for its decision to sell the company..
The developments follow Usen’s divestment of its 50% share in broadband VoD portal ShowTime Inc to online shopping giant Rakuten Inc for $18.51m (Y1.784bn) in March.
Additionally, Yahoo! Japan acquired a 51% controlling share of Usen’s wholly-owned free broadband internet contents portal GyaO in a merger with Yahoo! Japan’s own such service.
Following Gaga’s withdrawal from production and acquisitions, Usen CEO Yasuhide Uno invested $2.6m (Y250m) of personal funds to set up new independent production and acquisitions company U’s Films to supply Gaga with distribution titles. The company has several feature projects in development.