By Will Feuer
Shares of Lions Gate Entertainment (also known as Lionsgate) experienced a decline in afternoon trading following the company’s announcement to separate its studios business and merge it with a special-purpose acquisition company.
The New York-listed class A shares of Lions Gate fell 5% to $10.61. However, it is worth noting that the stock has seen an impressive 86% increase this year.
According to the company, this deal will value its studios business, which encompasses production-and-distribution, talent-management, and an impressive portfolio of intellectual property, at $4.6 billion, including debt. Notable IP assets include The Hunger Games, John Wick, and The Twilight Saga, among others.
Under the proposed plan, the studios business will merge with Screaming Eagle Acquisition, a blank-check firm. This merger will culminate in the establishment of a new company called Lionsgate Studios.
Following the completion of the deal, Lionsgate will maintain an ownership stake of approximately 87.3% in the studios business. It is important to highlight that Lionsgate will retain sole ownership of the Starz cable network and platform, renowned for its original series such as “Power” and “Outlander.”
