×
You will be redirected back to your article in seconds

Lionsgate’s done deal surprises observers

Analysis: Elaborate negotiations with Summit notable for lack of drama

Lionsgate buys Summit for $412.5 million | Wall Street mulls deal’s benefits

Lionsgate’s $412.5 million deal to buy Summit Entertainment, announced Friday, arrived with a notable lack of fireworks.

“There was never really much drama in this negotiation,” noted James Berk, CEO of Summit investor Participant Media. “It really unfolded in a pretty orderly fashion. I think that’s kind of unique.”

When the deal announcement came a few minutes after the close of markets Friday afternoon, the one real surprise to many was that the transaction wasn’t a tentative agreement but a complex completed transaction — financed as a leveraged buyout that cashes out Summit’s investors with a stake of about 5% in the amplified Lionsgate.

Summit’s ownership — which includes top Summit execs, Nala Investments and Suhail Rizvi’s Rizvi Traverse Management — had been considering early last year a move into TV production as a way to diversify operations from the core businesses of film production and foreign sales in order to take advantage of the success of the “Twilight” franchise. Toppers Rob Friedman and Patrick Wachsberger told Variety last February that the first moves would take place in the following months.

“We were looking into the funds it would have taken to expand,” Berk noted. “At the same time, Summit became very attractive as a potential acquisition so these conversations started with multiple parties.”

Besides monetizing the investment of the Summit owners, Berk said, the Lionsgate deal offers the benefits of being able to take better advantage of the “Twilight” and “Hunger Games” franchises, long-term stability, monetization of the Summit library and the firepower to compete effectively with the big six studios.

“This really is the right deal at the right time,” he added.

Berk also expects the deal to benefit Participant, which is already halfway through a five-year output deal with Summit and looking to ramp up feature production and move into TV production. The eight-year-old company — focused on areas such as the environment, healthcare, human rights, institutional responsibility, peace and tolerance — has backed “Syriana,” “Inconvenient Truth,” “Charlie Wilson’s War,” “Contagion” and “The Help.”

Berk admitted that he’s cognizant of there being one less buyer in Hollywood.

“On the one hand, it is frustrating to lose a player in the feature film market,” Berk told Variety following the announcement. “But if the company executes, there’s plenty of capacity for its product.”

More Film

  • Shailene Woodley probation Dakota Pipeline protest

    Cannes: Infotainment China Media Snaps Up "Misanthrope"

    Chinese sales and distribution company Infotainment China Media has bought the China rights to “Misanthrope,” the new serial killer thriller starring Shailene Woodley, from FilmNation Entertainment at Cannes. Woodley (“Big Little Lies”, the “Divergent” franchise”) will play a cop recruited by the FBI to hunt down a murderer. Damian Szifron (“Wild Tales”) and Jonathan Wakeham [...]

  • Watch Karen O & Danger Mouse’s

    Watch Karen O & Danger Mouse’s ‘Encounter With Lux Prima’ Documentary (EXCLUSIVE)

    Karen O & Danger Mouse’s “Lux Prima” is one of the year’s best albums so far — but it’s more than an album. “An Encounter with Lux Prima – The Art of Collaboration,” a short documentary chronicling the 18-month development of their multisensory art installation “An Encounter With Lux Prima” premieres today exclusively on Variety. [...]

  • Willem Dafoe Talks 'The Lighthouse' and

    Willem Dafoe on His New Films 'The Lighthouse' and 'Tommaso,' Robert Pattinson as Batman

    Willem Dafoe has spent the last two awards seasons on the campaign trail. The actor earned back-to-back Oscar nominations for his work in 2017’s “The Florida Project” and for last year’s “At Eternity’s Gate.” And if the critical reaction to “The Lighthouse” is any indication, he’ll be back on it soon. “The Lighthouse” is director [...]

  • Official First Look at the Women

    'Terminator: Dark Fate': Linda Hamilton, Arnold Schwarzenegger Return in First Trailer

    The Resistance’s war against Skynet rages on with the sixth installment of the “Terminator” series, “Terminator: Dark Fate.” The first trailer for the latest movie dropped on Thursday. The clip opens with two franchise newcomers, Mackenzie Davis and Natalia Reyes, as they’re being pursued by a Terminator (Gabriel Luna), one that seems to have some [...]

  • Malcom McLaren’s Son Joe Corré Preps

    Malcom McLaren’s Son Joe Corré Preps ‘Wake Up Punk’ Feature Doc (EXCLUSIVE)

    Malcolm McLaren and Vivienne Westwood’s son Joe Corré has voiced his opposition to a Sex Pistols feature film in the works, and is about to launch his own project, “Wake Up Punk.” The feature documentary will follow events after his decision to burn punk memorabilia worth millions of pounds. John Lydon has already tweeted that [...]

More From Our Brands

Access exclusive content