U.S. financier Colony Capital may be in negotiations to buy a minority share stake in Legendary Entertainment. The Hollywood production company behind “Godzilla” and “Pacific Rim” is owned by China’s Wanda group.

Bloomberg reported Sunday that Colony had held talks with Wanda. It reported that Colony may use a new fund, Colony Media Partners, for the stake purchase, and that the implied valuation would be “significantly lower” than the eye-popping $3.5 billion that Wanda paid for Legendary in 2016. The participants in Colony Media Partners are not currently known.

Bloomberg also said that Saudi Arabia’s Public Investment Fund had shown renewed interest in Legendary, after apparently discussing a $700 million investment in 2018.

Contacted by Variety on Monday local time, Wanda offered no comment. Representatives for Legendary also did not respond to Variety’s inquiries.

Colony Capital, which is headed by high-profile investor Tom Barrack, previously bought U.S. mini studio Miramax before selling it to Qatar’s beIN Media Group in 2016.

Joshua Grode, the lawyer and executive who currently heads Legendary, was previously a consultant to Colony and advised on its Miramax purchase in 2010. He and Barrack are understood to have remained in touch since Grode joined Legendary, and their conversations may have touched on Colony’s provision of investment capital intended for expansion of Legendary’s operations, as well as selling down some of Wanda’s existing ownership stake.

Legendary is currently fully funded by Wanda. But Wanda’s financial position has deteriorated since 2016, and its ability to do business overseas has been restricted.

Wanda was previously the most aggressive Chinese acquirer of U.S. entertainment properties. Its purchases included the 2012 deal for AMC, and Legendary and Carmike in 2016, before it was sharply reined back through a range of measures from the Chinese government.

As part of a massive debt-reduction drive, Wanda has sold off some of its hotels and most of its theme park and leisure properties. These include the studios it built in Qingdao.

https://variety.com/2019/biz/asia/tom-barrack-colony-capital-looking-at-investment-deal-wanda-legendary-1203282654/