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Lionsgate Chairman Mark Rachesky to Sell 10 Million Shares

Majority shareholder reduces his stake from 35.3% to 27.5%

Mark Rachesky, Lionsgate Entertainment’s majority stockholder, will sell off 10 million shares, the company said Tuesday. The Lionsgate chairman will unload the stock — his first sale in 10 years — via investment funds affiliated with his MHR Fund Management company.

The offering will reduce his stake in the TV and film production company, based in Toronto, Canada, from 35.3 percent to 27.5 percent, buy he’ll retain roughly 40 million shares and remain by far Lionsgate’s biggest investor.

Lionsgate will not lose any shares or see any profit from the sale and, other than diversifying its ownership, the company is not expected to feel any significant impact from the offering.

Since Rachesky bought the bulk of his Lionsgate stock years ago, when it was trading at $5 or $6, and it was up to $33.68 on Tuesday, it’s most likely a case of his monetizing some of his holdings.

These investment funds expect to grant to the underwriter a 30-day option (from the date of the underwriting agreement) to purchase up to an additional 1,500,000 common shares.

There will be no shares lost or proceeds gained in the offering for the Toronto-based Lionsgate, which produces the TV shows “Mad Men” and “Orange is the New Black” among others. Its film unit, which includes Summit Entertainment, is behind the blockbuster “Hunger Games” and “Twilight” franchises. Lionsgate recently closed a $375 million funding deal with China’s Hunan TV to bankroll movie and TV production for the next three years.

J.P. Morgan Securities LLC will act as sole underwriter for the offering.

The common shares will be sold pursuant to an effective registration statement filed with the Securities and Exchange Commission and available for review at www.sec.gov. A preliminary prospectus related to the offering of common shares is available there as well.


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