Late last year Lionsgate said it will merge its studio business, which includes its television studio and motion picture group, with Screaming Eagle Acquisition Corp as the company splits the studio division with Starz. With this change, Starz, the cable TV network, will be spun off into its own company and a new company, Lionsgate Studios, will be formed.
After these two new companies are realized in April, Lionsgate will keep 87.3% of the total shares of Lionsgate Studios and the Starz platform. Screaming Eagle public shareholders, founders, and investors will own 12.7% of the combined company. Lionsgate Studios is valued at $4.6 billion.
“This transaction creates one of the world’s largest publicly traded pure play content platforms with the ability to deliver significant incremental value to all of our stakeholders,” said Jon Feltheimer, chief executive officer at Lionsgate said in a statement when this was announced. “Coupled with the acquisition of the eOne platform scheduled to close next week… we’ve put together all of the pieces for a thriving standalone content company with a strong financial growth trajectory.”
Lionsgate has been planning to separate the studio and Starz for nearly two years. The company decided to wait until after it closed the acquisition of eOne from Hasbro to create the standalone studio, which will be announced next week.
This move allows Lionsgate Studios to be separated from any liabilities from its cable TV network Starz.
“We are thrilled to be part of establishing Lionsgate Studios as one of the only pure play content companies in the public markets, which is well positioned to unlock value for both existing and new shareholders,” said Eli Baker, chief executive officer for Screaming Eagle. “We believe this will be seen as one of the most innovative and value creating transactions the market has seen in some time.”
An exact date for the April split has not been announced.
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