×

Lionsgate, Starz Swap Stock as John Malone Joins Board

Lionsgate and Starz have entered into a stock exchange agreement that will see media mogul John Malone join the studio’s board of directors.

Expect tongues to wag on Wall Street given that Malone has a reputation for being an expert consolidator and the two companies have previously been viewed as acquisition targets for each other. A November report from the New York Post said that Starz was looking to sell itself for $5 billion and mentioned Lionsgate as a potential suitor. The companies have complimentary cable assets — Lionsgate is a part owner in pay TV channel Epix.

As part of the agreement, Lionsgate will exchange 3.43% common stock for a portion of Series A and Series B of Starz’s common stock. The stock was held by Malone and his affiliates and represents 4.51% of Starz common stock and 14.50% of the total voting power of Starz common stock.

Malone will remain Starz’s largest voting shareholder.

“Lionsgate has emerged as a leader in developing global content, and this transaction creates the potential for a number of strategic opportunities around the world with them,” said Malone in a statement. “I’m delighted to add my voice to the Board of Directors of one of the most exciting content companies in the industry.”

“John has been a pioneer in content distribution to the next generation consumer, and we’re delighted to add an investor of his caliber, experience and vision to our Board of Directors,” said Lionsgate Chief Executive Officer Jon Feltheimer and Vice Chairman Michael Burns in a joint statement. “We see tremendous value in Starz as well as the potential to explore a broad range of strategic initiatives in the future.”

Lionsgate has had a business relationship with Starz in the past.  The studio licenses more than 500 of its movies to Starz’s premium channels as part of a multi-year pact it signed in 2012.

Cable consolidation has been a driving force for Malone. The media investor has snapped up stakes in the likes of  Charter Communications and  ITV through his companies Liberty Global and Liberty Media, and engaged in a failed bid last year for Time Warner Cable.

Lionsgate’s future has been the subject of much speculation in investing circles. The studio behind “The Hunger Games” and “Divergent” was also reportedly eyed by Alibaba. The Chinese e-commerce giant was interested in buying a stake in the studio.

Shares of Lionsgate shot up 7.37% to $31.88 and Starz shares increased 3.41% to $31.75 after the agreement was announced.

 

More Film

  • Animation Studio Fire

    Kyoto Arson Attack: Animation Community Mourns Colleagues

    Thursday’s deadly attack on Japan’s Kyoto Animation studios left many in the animation community shocked and horrified by the loss of 33 of their colleagues. Another 36 people were injured in the attack, which was Japan’s deadliest ever. A suspect was arrested after pouring a flammable liquid inside the building, which caught fire and trapped [...]

  • Nicolas Cage

    Film News Roundup: Nicolas Cage's '10 Double Zero' Completes Financing

    In today’s film news roundup, financing has been secured for a Nicolas Cage police drama, feature drama “Topside” is unveiled and the late Tom Snyder is getting a tribute from his daughter. FINANCING COMPLETED DCR Finance Corp. has signed a deal to complete the financing for Nicolas Cage’s upcoming crime drama “10 Double Zero.” The [...]

  • Matt Damon and Tom McCarthy Team

    Matt Damon Teams with 'Spotlight' Director Tom McCarthy on New Film (EXCLUSIVE)

    Even as buzz grows for his upcoming race car drama “Ford v. Ferrari,” Matt Damon looks to keep the pedal to the metal: the A-lister is set to star in the Participant Media feature film “Stillwater” with Tom McCarthy directing. Damon attached himself in May, and the package was quickly acquired by Participant, who previously [...]

  • US actor Kevin Spacey (C) is

    Kevin Spacey Shouldn't Be Exonerated in Hollywood Even as Criminal Case Ends (Column)

    The news that criminal charges against Kevin Spacey in the Nantucket groping case have been dropped raises an inevitable question: does this mean he can claw his way back into Hollywood’s good graces? Or maybe more importantly: should it?  Spacey’s rapid descent was startling, even as it quickly followed that of the once untouchable producing [...]

  • Movie Ticket Subscriptions

    As MoviePass Fades, Theaters Fall In Love With Subscription Services

    MoviePass may be cratering, but movie theater subscriptions are here to stay. AMC and Cinemark already operate their own online ticketing services. And by the end of July, Regal Entertainment is expected to unveil a subscription plan for customers accustomed to getting all manner of entertainment for a monthly fee. With ticket sales down more [...]

  • This photo shows composer Hans Zimmer

    Hans Zimmer on Recreating Iconic Score: 'The Lion King' 'Brought People Together'

    Composer Hans Zimmer is seated at the mixing board at the Sony scoring stage, head bobbing to the music being performed by 107 musicians just a few yards away. He’s wearing a vintage “Lion King World Tour” T-shirt, frayed at the collar. On the giant screen behind the orchestra, two lions are bounding across the [...]

More From Our Brands

Access exclusive content