Chinese conglomerate Dalian Wanda Group has reportedly ‘tapped three banks including Citigroup Inc and UBS Group AG to work on a proposed initial public offering for its sports businesses’. A report from Reuters on this latest development cites ‘four people with knowledge of the matter’.
Wanda Group is one of China’s leading private conglomerates and China’s largest investor in the cultural and entertainment sector. It is the owner of IRONMAN, alongside the sports marketing agency Infront as well as an extensive endurance sport event portfolio through its Wanda Sports Holding business unit. In January, Reuters ran with a story that an initial public offering (IPO) is being considered ‘as part of efforts to rationalize [the group’s] portfolio’. The IPO would help Wanda Group meet debt repayment deadlines.
Wanda’s businesses operations have reportedly been rattled in the past year by a ‘government-led crackdown on overseas deals and high leverage’. The Chinese government is understood to have flagged certain overseas deals as ‘irrational’, with Wanda seen to be over-reaching its debt portfolio. Reuters notes that Wanda Group, which has a diverse portfolio across the sports, property and entertainment categories, ‘has yet to decide which exchange to list on and is considering both Hong Kong and New York’. It reportedly hopes to raise up to US$1 billion via the share sale.
Reuters adds that the floatation of Wanda’s sports assets would likely include Infront, the Swiss sports marketing company, and World Triathlon Corp (WTC) with its IRONMAN and broad endurance sports portfolio. IRONMAN was acquired in 2015 for US$650 million, in a deal that closed in November 2015.
The Reuters report notes that IPO plans are still at an early stage, with no guarantee that the float would be pursued by Wanda. It is also reported that ‘Wanda also tapped Hong Kong-based CLSA, the international investment banking arm of China’s CITIC Securities, for a potential IPO, one of the sources said.’
‘While an offshore listing makes more sense as the majority of its sports assets are located overseas, the company would also consider a listing for its domestic sports business in mainland China, according to one of the sources.’
In the past few years, World Triathlon Corp/IRONMAN has been notably acquisitive, particularly up to the summer of 2017:
- In June 2017, IRONMAN acquired 100% of Competitor Group Holdings (CGI), owner of the Rock ‘n’ Roll Marathon Series, in a move that established IRONMAN as the ‘largest running event producer in the world’.
- IRONMAN already owns or operates more than 20 running races worldwide, including the Standard Chartered Singapore Marathon, ASB Auckland Marathon, Marathon Bordeaux and Across the Bay 10K.
- Alongside the delivery of premier marathons, IRONMAN has, over the years, moved into road cycling events including the UCI Velothon Majors Series, as well as mountain bike events such as the Absa Cape Epic, and Cape to Cape and Port to Port MTB races.