March 3, 2024

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Lionsgate Studios Splices Starz Deal in SPAC – Deadline

Lionsgate Studios Splices Starz Deal in SPAC – Deadline

Lionsgate’s long-standing plan to split the studio with Starz finally made a move as the company announced today that Studios — the television studio, motion picture group, and film and television libraries — will merge with Screaming Eagle Acquisition Corp., a SPAC (special purpose acquisition company) led by Ely Baker.

The spin-off is expected to be finalized this spring to transform Lionsgate Studios into one of the largest publicly traded global content companies, and hopefully an attractive takeover target — adding more fuel to media M&A talk that’s already well underway. The studios portfolio includes franchise properties hunger Games, John Wick, The Twilight Saga And ghosts; A powerful film and television production and distribution company; A leading talent and production management company; And a large film and television library that saves a lot of money.

Lionsgate has been planning for nearly two years to separate the studio from Starz. CEO John Feltheimer last said in August that the idea is to wait until the company closes its acquisition of eOne from Hasbro, which will be announced next week.

SPACs have come and gone on Wall Street, but Screaming Eagle has a distinguished lineage. It is headed by Harry Sloan, a longtime media executive and current Lionsgate board member who has backed some of the oldest and most successful SPACs in the media and entertainment space in partnership with Jeff Sagansky and others. Saganksi is the director of Screaming Eagle.

As a result of this transaction, Lionsgate is expected to continue to hold 87.3% of Lionsgate Studios’ total equity, while Screaming Eagle’s general shareholders and founders and investors in the common equity financing are expected to own approximately 12.7% of Lionsgate Studios’ aggregate equity. Joint company. The deal values ​​Lionsgate Studios at an enterprise value of approximately $4.6 billion. Lionsgate Studios does not include the STARZ platform, which will remain wholly owned by Lionsgate.

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In addition to establishing Lionsgate Studios as an independent, publicly traded entity, the transaction is expected to provide approximately $350 million in gross proceeds to Lionsgate, including $175 million in PIPE (private investment in public equity) financing that has already been committed By leading mutual funds and other investors. .

Net proceeds from the transaction are expected to be used to strengthen Lionsgate’s balance sheet and facilitate strategic initiatives, including those related to its eOne business.

Lionsgate Studios common stock will trade separately from Lionsgate Class A (LGF.A) and Class B (LGF.B) stock as a single class of stock.

The transaction is subject to certain closing conditions including regulatory approvals and the approval of Screaming Eagle’s shareholders and general security holders.

“This transaction creates one of the largest publicly traded pure-play content platforms in the world with the potential to deliver significant additional value to all of our stakeholders,” said Michael Burns, Vice Chairman of Lionsgate and Feltheimer. “Combined with the acquisition of the eOne platform scheduled to close next week, the expansion of our partnership with 3 Arts and the strong performance of our content rosters, we have put all the pieces together for a thriving independent content company with a strong financial growth trajectory.”

“We are thrilled to be part of establishing Lionsgate Studios as one of the only pure-play content companies in the public markets, well-positioned to unlock value for both existing and new shareholders,” said Eli Baker, CEO of Screaming Eagle. “We believe this will be viewed as one of the most innovative and valuable transactions the market has seen in some time.”

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