Quantcast
Radio Facts
Radio and Music Industry News

$4.4 Billion Later and Lionsgate Has Now Acquired Starz

lionsgate_newlogo__130418225129,  a premier next generation content leader, and , a leading integrated media and entertainment company, today announced an agreement under which Lionsgate will acquire Starz for a combination of cash and stock totaling $4.4 billion, creating a global content powerhouse positioned to capitalize on opportunities worldwide.

Under the terms of the agreement, each share of Lionsgate common stock will be reclassified into 0.5 voting and 0.5 newly created non-voting shares. Holders of each share of Starz Series A common stock will receive $18.00 in cash as well as 0.6784 of a share of Lionsgate non-voting stock based on a fixed exchange ratio. Based on Lionsgate’s 20-trading day volume weighted average price (“VWAP”), as of June 28, 2016, the offer represents a total value of $32.73 per share to Starz , an 18% premium to Starz’s 20-trading day VWAP as of the same date. Holders of each share of Starz Series B common stock will receive $7.26 in cash and 0.6321 of a share of Lionsgate voting stock and 0.6321 of a share of Lionsgate non-voting stock.

The transaction significantly increases the combined company’s content creation capabilities, enhances its leadership in premium scripted programming and scales its global distribution footprint across mobile, broadband, and satellite . It also paves the way for a broad range of new content partnerships and accelerates the growth of Lionsgate and Starz’s own OTT services. In addition, the acquisition is expected to generate significant revenue and cost synergies.

To illustrate the scale of the transaction, the combined company will encompass: a 16,000-title film and library; the largest independent business in the world, including 87 original series on 42 U.S. networks; a feature film business that has generated over $7 billion at the global box office over the past four years; operation of or investment in 30 channel platforms around the world, including the flagship STARZ platform reaching 24 million U.S. subscribers, the STARZ ENCORE network with over 32 million subscribers and five OTT services; and a growing presence in location-based entertainment and video games driven by the company’s deep portfolio of brands and franchises.

“The combination of Lionsgate and Starz brings significant scale to our portfolio of content and distribution assets and will enable us to compete successfully in today’s rapidly evolving global entertainment marketplace,” said Dr. Mark H. Rachesky, Lionsgate’s Chairman of the Board. “By bringing together complementary resources, premium quality intellectual property and exceptional management, this strategic transaction positions us extremely well to unlock the underlying value of our content to create substantial lasting value for our shareholders.”

“This transaction unites two companies with strong brands, complementary assets and leading positions within our industry,” said Lionsgate Jon Feltheimer and Vice Chairman Michael Burns. “We expect the acquisition to be highly accretive, generate significant synergies and create a whole that is greater than the sum of its parts. Chris Albrecht and his team have built a world-class platform and programming leader, and we’re proud to marshal our resources in a deal that accelerates our growth and diversification, generates exciting new strategic content opportunities and creates significant value for our shareholders.”

Greg Maffei, Chairman of Starz, said, “Chris Albrecht and his team have grown Starz into an industry leader that provides highly-rated and diverse content, drawing critical claim and brand recognition for Starz. Together, Lionsgate and Starz form an entertainment powerhouse with a world-renowned studio that produces blockbuster movies and channels with must-have programming that will be able to capitalize on content opportunities across multiple platforms. The combined company will be well-positioned to return more value to our shareholders and effectively compete in the global media marketplace.”

“Jon, Michael and the rest of the Lionsgate team have built the first major new Hollywood studio in decades, and we’re thrilled to join with them in a transaction that multiplies the strengths of our respective businesses,” said Starz Chief Chris Albrecht. “Our similar entrepreneurial cultures and shared vision of the future will make this alliance an incredible fit that creates tremendous value for our shareholders, great content for our audiences and limitless opportunities for our newly-combined company. I am very appreciative of the work, passion and dedication of both of our companies’ employees and more enthusiastic than ever about the future of our business.”

The agreement has been approved by the boards of directors of Lionsgate and Starz and will be submitted to their respective shareholders for approval as well as to regulatory authorities. The proposed creation of Lionsgate non-voting stock is also subject to shareholder approval. Closing is expected to occur by year-end.

The Company intends to fund the cash portion of the deal with a combination of newly issued bank and bond financing. Pro forma leverage, excluding synergies, is expected to be approximately 5.0x-5.5x as of December 31, 2016, with the ability to rapidly delever given the highly cash generative nature of the combined entity.

LionTree Advisors is serving as exclusive financial advisor and Baker Botts LLP is serving as legal advisor to Starz. LionTree Advisors provided a opinion to the board of directors of Starz. The Raine Group is serving as financial advisor and Weil, Gotshal & Manges LLP is serving as legal advisor to the Special Committee of Starz’s board of directors. The Raine Group also provided a fairness opinion to the Special Committee of Starz’s board of directors.

PJT Partners is serving as lead financial advisor to Lionsgate. Additionally, J.P. Morgan, Bank of America Merrill Lynch, Deutsche Bank and Credit Suisse are serving as financial advisors to Lionsgate. Wachtell, Lipton, Rosen & Katz and Dentons are serving as legal advisors to Lionsgate. Financing was provided by J.P. Morgan, Bank of America Merrill Lynch and Deutsche Bank. PJT Partners also provided a fairness opinion to the board of directors of Lionsgate and advised on arranging the transaction financing.

Lionsgate and Starz will hold a at 9:00 A.M. ET/6:00 A.M. PT today, June 30. Interested parties may participate live in the conference call by calling (800) 230-1074 (612-332-0226 outside the U.S. and Canada). A full digital replay will be available from today, June 30, through July 6, by dialing (800) 475-6701 (320- 365-3844 outside the U.S. and Canada) and using access code 397261.

See the Most Read Stories for 2019


Related posts

Morgan State University Board of Regents Approves New Bachelor of Science Degree in Cloud Computing and New University Policies

Morgan State

ANDREAS KATSAMBAS TO LEAD BMG IN LATIN AMERICA AND CANADA IN NEW GLOBAL EXPANSION DRIVE 

Kevin Ross

RADIO SHOW EXECUTIVE SESSION TO FEATURE CEOs FROM IHEARTMEDIA, ENTERCOM AND CUMULUS MEDIA

Kevin Ross

Toy Company Hasbro’s Acquisition of eOne, Including Death Row Records Speaks Volumes

Kevin Ross

BUSINESS: Shaq Gives Coffee A Shot, Becomes an Investor and Brand Ambassador

Kevin Ross

DUALTONE MUSIC GROUP PROMOTES LORI KAMPA, JOEY LUSCINSKI, AND WHITAKER ELLEDGE

Kevin Ross

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

16 Shares
Share16
Tweet
Share
Pin
WhatsApp