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Alibaba buys $383m stake in film producer

The e-commerce giant has been hunting for entertainment content as China’s online video market grows.

Alibaba Group purchased a 2.4 billion yuan ($383 million) stake in Chinese film company Beijing Enlight Media as the e-commerce giant expands its television and entertainment offerings.

Hangzhou Ali Venture Capital, an Alibaba subsidiary, bought shares of Enlight Media at 24.22 yuan apiece in a private placement, according to a statement to the Shenzhen stock exchange Wednesday. Shares of Enlight Media, which is known for its film “Lost in Thailand,” rose by the exchange-imposed limit of 10 percent to 33.11 yuan, giving it a market value of 33.5 billion yuan.

Alibaba has been hunting for entertainment content through tours in Hollywood, as China’s online video market is expected to more than double to 90 billion yuan in 2018 from an estimated 36 billion yuan this year, according to IResearch. Enlight Media produces local television shows including “Top Chinese Music” and “Chinese Entertainment Reports,” according to its earnings report.

“Beijing Enlight Media has had a long track record of producing hit TV shows,” said You Na, an analyst at ICBC International Research Ltd. in Hong Kong. “Alibaba most likely will consolidate the previous video and content businesses it has already bought to expand its market share.”

Melanie Lee, a Hong Kong-based spokeswoman for Alibaba, declined to comment.

Shares surge

On Tuesday, Enlight Media’s shares surged to their highest level since October 2013. The stock rose as much as 9.5% Wednesday in the hours before the statement to the Shenzhen exchange.

Alibaba and its billionaire founder Jack Ma’s Yunfeng Capital completed the purchase of a $1.2 billion stake in online video website Youku Tudou in August. The Hangzhou-based company in June bought a 59.6% stake in ChinaVision Media Group, which later changed its name to Alibaba Pictures Group.

Ma showed interest in partnering with Sony on movie franchises including “Ghostbusters” when he met with Hollywood executives in October, e-mails revealed by hackers show. Alibaba also considered investing in “Pixels,” a 3-D animated comedy starring Adam Sandler, and intends to produce about 10 movies a year, the e-mails showed.

©2015 Bloomberg News

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