As a seasoned investor with a penchant for Hollywood and the ever-evolving world of streaming, I find Lionsgate‘s latest move to be a strategic masterstroke. The proposed separation of its studio operations from Starz is a bold step towards adapting to the shifting landscape of media and entertainment.
Lionsgate is moving forward with plans to split its film studio division away from Starz, its television and streaming service branch.
On Wednesday, I learned that a Hollywood studio is officially moving forward with the separation of their studios business, which will be known as Lionsgate Studios Corp., and their media networks business, primarily Starz. They’ve filed a Form S-4 registration statement with the U.S. Securities and Exchange Commission to make this long-awaited split happen. As a gamer, I can’t wait to see what these changes might bring!
As a gamer, I’m excited about the news that our favorite entertainment company, Lionsgate, is planning a big move! In simple terms, they’re going to split their studios business, known as LG Studios, from Starz. This means we’ll have two separate companies trading publicly.
Previously, Lionsgate separated its film and TV production business by merging it with a Special Purpose Acquisition Company (SPAC). This move formed a new publicly traded company, which was planned to eventually split from Starz. Consequently, Lionsgate Studios emerged as an independent entity, listed on NASDAQ, boasting a substantial collection of movies and TV series franchises as its primary assets.
In the setup of the SPAC deal, Lionsgate Studios was largely owned by its parent company (approximately 87.3%), whereas Screaming Eagle Acquisition Corp. held roughly 12.7% of the shares as its equity share.
The major Hollywood production company is considering different strategies regarding Starz, one of which involves splitting the pay TV and streaming service from its studio operations into two distinct entities. This move seems aimed at enabling investors to evaluate the worth of Starz and the studio independently, given the shrinking media and entertainment industry.
Meanwhile, certain prospective buyers seem to view Starz as a streaming service, but others are considering Lionsgate and its content collection as a potential independent production studio acquisition. This, as tech giants such as Apple and Amazon make their moves in the film industry.
Once the formal separation as outlined is completed, original shareholders of Lionsgate, the movie studio in Hollywood, will possess shares in the two publicly traded companies that are now separate entities. These transactions, which include a multifaceted process of exchanging shares for shareholders, aim to be tax-free (or nearly so) from a federal income tax perspective in the United States for holders of LGEC and LG Studios common shares.
The document clearly explains additional aspects regarding the proposed structure for the independent studio and media networks divisions that Lionsgate aims to establish. Lionsgate intends to convene a combined annual and special shareholders’ meeting at their headquarters in Vancouver (date yet to be determined) for approval of the planned separation contract, as stated in the SEC filing.
The Lionsgate board proposes endorsing the plan that outlines the formal division of their studio operations from Starz. Following the completion of these transactions, Lionsgate anticipates that the studio business will be managed by CEO Jon Feltheimer, Michael Burns in his role as vice chair, and Jimmy Barge as CFO, among others.
Lionsgate’s longtime leader, Feltheimer, has extended his tenure as CEO for another five years, lasting until July 31, 2029, after renewing his contract at the studio in August. On the other hand, Jeffrey Hirsch, president and CEO of Starz, along with Alison Hoffman, president of Starz Networks, and CFO Scott Macdonald, among others, are anticipated to manage the post-closing operations of Starz.
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2024-11-27 17:54