Lions Gate is hitting up the markets for major coin for the second time in five months, making it look more likely the indie studio is on the hunt for another acquisition target.
Company filed Thursday to raise $150 million-$175 million in a private debt placement and likely plans to use the funds to retire its expensive short-term debt and for potential acquisitions or a stock buyback.
After raising $150 million in a similar private placement last fall, studio used all of that money to slash the debt it took on to fund its 2003 acquisition of Artisan.
But with its bank loans now totaling just $75 million, Lions Gate will have at least $75 million in cash left even if it pays off every penny of short-term debt with its new subordinated notes, which aren’t due until 2025.
Studio wouldn’t disclose any details of its plan for the funds beyond that they may be used in an acquisition or for general corporate purposes.
But execs have previously said they are considering a number of options, including a stock buyback, buying into complementary businesses such as vidgames, or accelerating growth of its core business by purchasing a competitor, most likely one that would help boost studio’s 8,000-pic library.
Investors seemed cool on the move. After closing down slightly at $10.35 before news was announced, Lions Gate stock was down 3.5% in after-hours trading.