Chinese cinema firm is seeking to buy all or part of AMC

China’s biggest theater company is trying to get a foothold in the U.S. by picking up some or all of AMC Entertainment Inc., an arrangement that could further pry open the market for Hollywood films in the world’s most populous country.

AMC, the second-largest movie theater chain in the U.S., is negotiating a deal to sell all or part of itself to Wanda Group, two people familiar with the talks said.

The deal, if concluded, would make Wanda the first Chinese company to establish a major presence in the North American movie theater business.

AMC, which has 5,048 screens in 347 theaters in the U.S. and Canada, would gain access to China’s burgeoning market. China, in the midst of a multiplex building boom, was second to Japan at the international box office last year with $2 billion in ticket sales, according to the Motion Picture Assn. of America.

The talks between AMC and Wanda have intensified in recent weeks after AMC pulled the plug on a planned stock offering to raise as much as $450 million to pay down debt, according to sources who asked not to be identified because the negotiations were confidential.

Top shareholders in AMC include JPMorgan Partners, Apollo Investment Fund and Bain Capital Investors.

AMC withdrew the offer because of concerns that market conditions weren’t ripe for a stock offering, and possibly to position the company for a sale, people close to the transaction said. Selling to Wanda would allow the three firms to recoup an investment they made when they bought the company AMC in 2004.

A spokesman for AMC declined to comment, as did a representative for Wanda. News of the talks with Wanda was first reported by the New York Times.

Wanda Cinema Lines Corp. is the largest cinema chain in China, with 86 theaters and 730 screens. The parent company, Wanda Group, is a major real estate developer, with interests in department stores and hotels.

The company has been in the news because its chairman, Wang Jianlin, is reportedly under investigation for ties to disgraced Chongqing party chief Bo Xilai. Bo was sacked and accused of corruption, and his wife charged with the murder of a British businessman. Wanda’s headquarters are in the northeastern city of Dalian, where Bo was once a senior official.

AMC, which is valued at about $1.5 billion, posted a loss of $82.7 million on revenue of $1.93 billion in the 39 weeks ended Dec. 29, 2011, compared with a profit of $36.88 million on revenue of $1.9 billion during the same period in 2010, according a filing with the Securities and Exchange Commission.

The Kansas City, Mo., company cited higher interest expenses, investment losses in Beverly Hills 3-D technology company RealD Inc. and costs related to its acquisition of Kerasotes Showplace Theatres of Chicago, the nation’s sixth-largest cinema chain.

In May, 2011, AMC closed a deal to acquire 92 theaters and 928 screens from Kerasotes.

Among the biggest theater circuits, only Cinemark Holdings Inc. and National Amusements Inc. have a major presence outside North America, mainly in Latin America and Europe.

China has been aggressively expanding its own entertainment industry, both to boost the country’s global influence or “soft power” and to feed the demands of a surging middle class. Several Hollywood studios have been maneuvering to take advantage of the opportunity to grow business in China.

Walt Disney Co. in Burbank recently said it would partner with the animation arm of China’s Ministry of Culture and China’s largest Internet company to help develop China’s animation industry.

And DreamWorks Animation SKG Inc. of Glendale has announced a joint venture with Shanghai Media Group, China’s second-largest media company, to build a family entertainment company to produce animated and live-action movies and TV shows for the Chinese market. That deal was unveiled in February when Chinese Vice President Xi Jinping visited Los Angeles.

China is also rapidly expanding its theater industry. Although no major U.S. theater chain has expanded into China, Real Inc. in Beverly Hills has partnered with Beijing SAGA Luxury Cinema Management Co. to equip the Chinese theater chain with 3-D technology. Imax Corp., the Canadian big-screen theater company, formed a joint venture with Wanda to open 75 theaters by 2014.

Hollywood studios, however, have been frustrated by tight restrictions on the number of foreign films China allows into the country each year under a revenue-sharing agreement. The Chinese government recently agreed to ease some of the restrictions, allowing more foreign movies into the country.

richard.verrier@latimes.com

Times staff writer David Pierson in Beijing contributed to this report.