Lions Gate Entertainment (NYSE:LGF) plans to spin off its studio business and take it public via a special purpose acquisition company (SPAC) in a blank-check deal that values the created company at $4.6 billion, including debt.
The studio behind the Saw, John Wick and Hunger Games franchises will merge with Screaming Eagle Acquisition Corp, Lionsgate announced Friday.
The deal severs Lionsgate's studio business, which owns roughly 18,000 film and television titles, from its Starz cable and streaming division and is expected to generate $350 million in gross proceeds.
Lionsgate will hold an 87.3% stake in the newly created entity, with Screaming Eagle investors holding the remainder. The deal is expected to close in the spring of 2024.
The deal comes with another potential major shakeup in the film industry on the horizon, as Warner Bros Discovery Inc (NASDAQ:WBD) and Paramount Global (NASDAQ:PARA) are reportedly in talks to merge through a $38 billion deal.
The chief executives of the two Hollywood giants, Warner Bros’s David Zaslav and Paramount’s Bob Bakish, met in New York on Tuesday to discuss the deal, according to reports.
Consolidation of the duo's respective streaming services, Max and Paramount, to better rival the likes of Netflix and Disney+, was reportedly discussed.