Lionsgate SPAC Merger, Studio Spinoff Expected to Close in May

The new company, Lionsgate Studio Corporation, will trade on the NASDAQ under the ticker symbol LION

Lionsgate (Courtesy)

Lionsgate’s spinoff of its studios business into a separate, publicly traded company through a merger with special purpose acquisition company Screaming Eagle Acquisition Corp. has moved one step closer to fruition.

On Tuesday, the U.S. Securities and Exchange Commission declared the registration statement for the proposed business combination effective, paving the way for a listing on the NASDAQ under the ticker symbol LION in May.

On May 7, Screaming Eagle shareholders and public warrant holders will participate in an extraordinary general meeting in connection to the merger. A proxy statement and prospectus related to the meeting will be mailed to shareholders and public warrant holders of record as of the close of business on April 16, 2024.

Lionsgate and Screaming Eagle anticipate that the merger will close in early May, subject to the satisfaction of closing conditions.

Under the SPAC deal, Lionsgate is expected to own 87.3% of the new entity, known as Lionsgate Studio Corporation. Lionsgate Entertainment will continue to own Starz and its content relationship with the studios business will remain unchanged.

Management has previously touted the transaction as an opportunity to significantly reduce leverage, increase “strategic optionality” for Starz and its studios business, and preserve Lionsgate’s “highly attractive capital structure.”

The SPAC deal is expected to raise between $350 million and $409.5 millionto fund strategic initiatives. The two parties have increased the total committed financing from $175 million to $225 million after entering into an agreement for an additional $50 million on April 11.

Looking ahead, Lionsgate Studios is expected to report adjusted operating income of $300 million to $350 million for fiscal 2024, not including the impact of the eOne acquisition. For fiscal 2025, it expects the entity will generate $370 million in adjusted OIBDA before eOne. It expects eOne will exit the year with an annual run-rate adjusted operating income contribution of $60 million.


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