The owner of Dick Clark Production said Friday that it has "terminated its agreement" to sell the TV production company to China's Wanda Group for $1 billion.
Dick Clark Productions owner Eldridge Industries said that it had called off the deal after Wanda, which announced plans to purchase the TV production company in November, failed to complete the sale.
"Eldridge's affiliate terminated the agreement this week after Wanda failed to honor its contractual obligations," Eldridge said in a statement. "Eldridge's affiliate also has filed with the Delaware Chancery Court to compel release of the balance of escrowed funds to which it is contractually entitled given Wanda's failure to consummate the sale."
The escrowed amount, which represents a potential break-up fee, is said to be $25 million, according to Deadline Hollywood, which said that is on top of a $25 million payment that Wanda made to Eldridge in January in return for its agreement to extend the closing date.
The purchase of the production company would have given Wanda its first toehold in unscripted and live event production in the US market. Dick Clark Productions is home to such awards show franchises as the Golden Globes, the American Music Awards and ACM Awards. It produces ABC's annual Dick Clark's New Year's Rockin' Eve special among other live events.
The Beijing-based Wanda is a real estate and media conglomerate that owns AMC Theatres and Legendary Entertainment. Wanda CEO Wang Jianlin said in January the company expected to spend $5 billion to $10 billion on acquisitions this year, most of it focused on entertainment and sports.
Media reports have said for weeks that the deal was in trouble because of the Chinese government's tightening of the movement of capital out of the country and Wanda's hesitation over the purchase price amid struggles of Legendary Entertainment, which it acquired last year for $3.5 billion. A group of investors led by Guggenheim Partners bought Dick Clark Productions it for $380 million less than five years ago.
Legendary recently co-produced The Great Wall and Warcraft, which were disappointments. Legendary Chairman and CEO Thomas Tull resigned in January, leaving Wanda film executive Jack Gao in charge as its interim chief.
Wanda reported in January that its revenues dropped 14 percent in 2016. That was Wanda's first decline in more than a decade.
