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What: Shares of Bona Film Group (UNKNOWN:BONA.DL) were dazzling investors today, popping as much as 10% after the investment firm Fosun Group took an equity stake in the company.
So what: Bona, the Chinese film distributor, said that Fosun, a large-scale investment group, will acquire 2,000,000 shares, or the equivalent of 6.4%, of the company at a price of $5.20 per American depositary share. Fosun, which has a market cap near $40 billion, will purchase the shares from Matrix Partners and some of Bona's pre-IPO shareholders, including Bona CEO Dong Yu, who praised the deal, saying, "We believe this investment will create meaningful synergies between the two parties."
Now what: The move seems to be a step in the right direction for Bona, which operates 20 movie theaters in China and produces a wide range of films. Like many industries in China, the company figures to grow alongside the country's burgeoning middle class. China's richest man, Wang Jianlin, recently plunked down $8.3 billion to build the Qingdao Oriental Movie Metropolis, a strong indicator for the industry's growth. With movements like that afoot, Bona could have a bright future.
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