CGI Holdings Sale Imminent... MBK·Mirae Asset vs. CJ Strategic Battle Begins

by Lee Seungjin

Published 06 Aug.2025 09:34(KST)

Updated 07 Aug.2025 14:01(KST)

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FI Exercises Drag-Along Rights After CGI Holdings’ Listing Failure
Prolonged Film Industry Slump and Ongoing Losses Make Finding a Buyer Difficult
Abandoning CGI Holdings Signals CJ CGV’s Withdrawal from Asia... Complex Calculations Ahead

The management rights of CGI Holdings, which oversees CJ CGV's movie theaters in Asia, have entered the process of a forced sale. This comes after the consortium of MBK Partners and Mirae Asset Securities PE, the second-largest shareholder and financial investor (FI) of CGI Holdings, notified its intention to exercise drag-along rights. However, CJ CGV chose not to exercise its call option, which is the right to purchase a specific asset at a predetermined price.

According to the investment banking (IB) industry on August 6, CJ CGV decided not to exercise its call option on CGI Holdings. Under the shareholders’ agreement between CJ CGV and MBK Partners·Mirae Asset Securities PE, CJ CGV was required to decide whether to exercise the call option within 10 business days after receiving the drag-along rights notification. However, CJ CGV ultimately did not respond. Failure to respond regarding the call option is considered a forfeiture of the right to repurchase the shares.

CGI Holdings is the consolidated entity for CJ CGV’s operations in China, Vietnam, and Indonesia. MBK Partners·Mirae Asset Securities PE acquired a 28.57% stake in CGI Holdings for 333.5 billion KRW in 2019 by participating in a pre-IPO capital increase. At that time, a shareholders’ agreement was signed, promising to list CGI Holdings on the Hong Kong Stock Exchange by June 2023 at a corporate value of at least 2 trillion KRW. The agreement included provisions for a call option and drag-along rights covering the largest shareholder’s stake in case of failure to list.

However, the listing plan began to unravel due to the impact of the COVID-19 pandemic, which forced theaters to close and caused CGI Holdings’ performance to deteriorate. In July of last year, CJ CGV acquired 198,830 shares of CGI Holdings from MBK Partners·Mirae Asset Securities PE for 126.2 billion KRW, thereby extending the period for exercising drag-along rights to this year. MBK Partners·Mirae Asset Securities PE currently holds a 17.58% stake in CGI Holdings. Based on last year’s transaction price, this stake is valued at nearly 250 billion KRW.

With CJ CGV forfeiting its call option, the ball is now in the court of MBK Partners·Mirae Asset Securities PE, but the calculations for both sides are complex.

First, there is uncertainty over whether there will be a buyer for CGI Holdings’ management rights, given the overall slump in the film industry. CGI Holdings has been posting consecutive losses. Last year, it recorded a net loss of 24.3 billion KRW, and in the first quarter of this year, it posted a loss of 3.5 billion KRW.

If the sale process is delayed, it will inevitably become a significant burden for MBK Partners·Mirae Asset Securities PE.

Despite giving up the call option, CJ CGV’s position is also complicated. Selling CGI Holdings effectively means CJ CGV’s withdrawal from the Asian market. It is not easy to abandon the global business, which is a key growth driver. In particular, recent visible performance improvements in Vietnam and China are a point of concern.

In the case of CJ CGV Vietnam, which accounts for most of CGI Holdings’ earnings, the company turned a profit last year. In the first quarter of this year, it posted a net profit of 4.5 billion KRW, continuing its positive trend. It operates 83 theaters and 478 screens in major Vietnamese cities such as Hanoi and Ho Chi Minh City. UVD Enterprise, a subsidiary of CGI Holdings, recorded a net loss of 12.2 billion KRW last year but achieved a net profit of 200 million KRW in the first quarter of this year, successfully turning a profit. UVD Enterprise operates 113 theaters and 896 screens in China and Hong Kong.

MBK Partners·Mirae Asset Securities PE is expected to proceed with the sale of CGI Holdings’ management rights, including selecting a lead manager, while also continuing final negotiations with CJ CGV. It is known that their agreement allows for about a month of negotiations even after the exercise of drag-along rights.

An industry insider explained, “It appears that both sides are revealing their cards one by one and have entered a strategic standoff. Since CGI Holdings has not yet been put on the market, it is too early to make any assumptions, and both sides are likely to continue their behind-the-scenes tug-of-war.”