Lionsgate Unloads Chunk of TV Guide

One Equity Partners, Allen Shapiro get 49 percent stake.

Last Updated: June 17, 2009 @ 11:11 AM

Lionsgate has agreed to sell 49% of TV Guide Network and the TV Guide Online business TV Guide, for $123 million to One Equity Partners and Allen Shapiro, the former CEO of Dick Clark Prods.

 

As part of the deal, One Equity Partners has the option of buying another 1 percent of the cable channel and website.

 

The cash could go towards revamping the TV Guide Channel, which has little original programming and is being challenged by the advent of on-screen electronic program guides offered by satellite and cable providers. Lionsgate may also need the money to fight a proxy war from Carl Icahn, who owns 14.5% of the studio, and has in the past criticized Lionsgate for overpaying for TV Guide. He recently tried to buy $316 million in debt.

 

Lionsgate purchased the TV Guide assets for $255 million from Macrovision Solutions Corp. in January. Late last year, Macrovision reached a deal to sell the TV Guide assets to One Equity Partners — an investment unit of JP Morgan Chase & Co. — and Shapiro but instead sold to Lionsgate.

 

Macrovision, a Santa Clara, Calif.-based technology company, purchased TV Guide parent company Gemstar-TV Guide last year so it could get its hands on the TV Guide-branded program guide. In October, it sold TV Guide magazine to an equity group for $1 and an assumption of debt, taking a writedown of $208 million on its fourth quarter earnings.

 

The TV Guide Network reaches roughly 83 million homes and is one of the 30 most widely-distributed cable networks, Lionsgate said Thursday.

 

"Given their longstanding interest in the channel and the alignment of our interests, they are the ideal partners," Lionsgate CEO Jon Feltheimer said in a statement. "OEP is a distinguished and well-capitalized firm that shares our vision of building a dynamic entertainment channel driven by Lionsgate-branded content that will prove to be a major force within our industry."

 

Lionsgate also co-owns FEARnet, a video-on-demand Internet horror channel, with Sony and Comcast. It is also developing the network Epix with Viacom and MGM which will launch in October. The studio’s most recent box office offerings, including "My Bloody Valentine 3-D" and "Tyler Perry’s Madea Goes to Jail," have earned about $190 million in the fourth quarter.

Shares in the independent film studio behind the "Mad Men" TV series were up 6 cents or 1.1 percent to $5.47 Thursday afternoon.