Shanghai Film Group Corporation is in talks with Time Warner Inc's cinema unit to take over its two cinemas in China as the world's biggest media company plans to quit the country due to a regulatory change.

It is unknown at what stage of the talks the two parties are at, or when a deal would be sealed, as some other companies have also shown interest, according to Warner Brothers Inc's public relations agency.

"Of course the two will talk about the takeover as they were partners in the two cinemas," said Gao Ming of Ruder Finn Public Relations. But he said the partnership won't give Shanghai Film priority over other interested companies in taking over the two cinemas as the deal does not include such preferential treatment.

Warner Bro's cinema unit, Warner Bros International Cinemas, owns 49 percent in Paradise Warner Cinema, one of the two cinemas, which is located in Shanghai's Xujiahui area. Shanghai Film owns the remaining stake.

WBIC owns the other cinema in Nanjing, capital of Jiangsu Province, with a 51 percent stake while Shanghai Film owns the rest of the stake. The Nanjing cinema was the first to be controlled by foreign investors.

Box office receipts at the Shanghai cinema, opened in 2002, have topped all cinemas in the country in the past three years. In 2004, the 1,529-seat cinema's ticket sales reached 31.8 million yuan (US$4 million).

WBIC said in a statement last month that it will withdraw from China as the policy enacted late last year bans it from controlling its ventures. The rule says that Chinese mainland investors must own at least 51 percent or play a leading role in the joint ventures with foreign investors.

Source:佚名