Lionsgate to spin off studio enterprise in $4.6 billion SPAC deal


Lionsgate is spinning off its movie and TV studio enterprise — greatest identified for the “Starvation Video games,” “Noticed” and “John Wick” film franchises — from pay cable unit Starz.

Santa Monica-based Lionsgate will merge its studio arm with Screaming Eagle Acquisition Corp., a particular objective acquisition firm, or SPAC, in a deal that values the property at $4.6 billion.

Lionsgate will publicly commerce its studio enterprise as Lionsgate Studios in an effort to boost new capital. Starz, which can stay within the current publicly traded Lionsgate firm, won’t be a part of Lionsgate Studios.

Lionsgate mentioned it expects the merger to boost about $350 million in capital, which might be utilized in half to assist fund Lionsgate’s $375 million acquisition of eOne, the movie and TV studio behind “Yellowjackets,” which airs on Paramount International’s Showtime community.

SPACs are publicly traded funding automobiles arrange for the precise objective of buying one other firm. These monetary devices grew to become standard lately as a means for firms to go public or spin off with out going by way of the effort of a conventional preliminary public providing.

Lionsgate will personal about 87.3% of Lionsgate Studios shares, whereas Screaming Eagle shareholders and buyers will personal about 12.7%.

“This transaction creates one of many world’s largest publicly-traded pure play content material platforms with the flexibility to ship vital incremental worth to all of our stakeholders,” Lionsgate Chief Govt Jon Feltheimer and Vice Chair Michael Burns mentioned in a joint assertion on Friday. “We’ve put collectively the entire items for a thriving standalone content material firm with a robust monetary development trajectory.”

A by-product has been within the works for a number of years. Lionsgate bought Starz in 2016 in a $4.4-billion deal that was meant to assist the corporate strengthen its enterprise by giving it an in-house cable TV distributor for its programming. However with the decline in linear TV, Lionsgate believed the mix of its studio enterprise with Starz has impacted the valuation of its property. Starz is thought for reveals together with “Outlander.”

By separating its movie and TV enterprise, which has an in depth library of roughly 20,000 titles, Lionsgate might discover a purchaser for its studio enterprise — a deal that might proceed the continuing merging of Hollywood’s main studios.

The highest executives at Warner Bros. Discovery and Paramount International have engaged in preliminary discussions about doubtlessly merging their firms.


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