`Bad Moms' Studio Is Said to Hire Banks for Hong Kong IPO

(Bloomberg) -- STX Entertainment, a filmmaker and distributor backed by China’s Tencent Holdings Ltd., has hired banks to work on a potential Hong Kong initial public offering that could raise about $500 million, according to people with knowledge of the matter.

Goldman Sachs Group Inc. and JPMorgan Chase & Co. are advising the U.S. studio on the possible share sale, the people said, asking not to be identified because the information is private. STX is targeting an IPO as soon as the first quarter next year, according to the people.

Valuation ranges of $2.5 billion to $4.5 billion for the distributor of feature films “Bad Moms” and “The Circle” have been discussed, the people said.

An offering from Burbank, California-based STX would be a rarity in Hong Kong, which hasn’t seen an IPO from a U.S. company in more than four years, according to data compiled by Bloomberg. Secondary listings from foreign firms in the city are also falling out of favor. Glencore Plc and Coach brand owner Tapestry Inc. this week said in separate statements they would delist, citing low trading volume.

Hong Kong hosted $12 billion of first-time share sales this year, 45 percent less than during the same period in 2016, according to data compiled by Bloomberg.

STX also has ventures in television, digital media and virtual reality. The studio has been working on Chinese co-productions such as the recently released “The Foreigner” with Jackie Chan, which generated $129 million globally. Most ticket sales were in China. This weekend the studio will release “A Bad Moms Christmas” in the U.S. and Canada.

Tencent and Hong Kong phone carrier PCCW Ltd. led a fundraising round last year that valued STX at almost $1.5 billion, a person with knowledge of the matter said at the time.

Other investors include private equity firm TPG, the Chinese firm Hony Capital and Hollywood producer Gigi Pritzker’s DNS Capital, according to STX’s website. The company also has an agreement with Chinese studio Huayi Brothers Media Corp. to co-produce, co-finance and co-distribute films.

--With assistance from Michael Hytha

To contact the reporters on this story: Crystal Tse in Hong Kong at ctse44@bloomberg.net, Vinicy Chan in Hong Kong at vchan91@bloomberg.net, Anousha Sakoui in Los Angeles at asakoui@bloomberg.net.

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Crayton Harrison at tharrison5@bloomberg.net, Timothy Sifert, Elizabeth Fournier

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