Lionsgate Takes Next Step Toward Spinning Studio Off As Separate Public Company

Lionsgate has moved one step closer to spinning off its film and TV studios business in a Special Purpose Acquisition Company (SPAC) to create a separately traded public company.

Screaming Eagle Acquisition Corp., a SPAC — often referred to as a blank check company — led by SPAC sponsor Eagle Equity Partners and CEO Eli Baker in an SEC filing on Tuesday said the registration statement for the proposed merger has been declared effective by the U.S. Securities and Exchange Commission, which should pave the way for the deal to close and Lionsgate Studios to launch as a standalone company in early May by listing on NASDAQ under the ticker symbol LION.

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The merger prospectus has been mailed to Screaming Eagle’s shareholders and public warrant holders, and extraordinary shareholders meetings have been called for May 7. “The parties anticipate that the business combination will close in early May, subject to satisfaction of the conditions to the closing of the business combination,” Screaming Eagle said in a statement.

Launching Lionsgate Studios as a standalone public company aims to give the Hollywood studio, led by CEO Jon Feltheimer, options before completing a long-awaited separation of the film and TV studios and Starz. The newly merged entity, Lionsgate Studios, as a publicly traded vehicle, will be able to raise fresh capital and merge with existing businesses.

The SPAC deal is also seen as the best way to uncover hidden shareholder value for the studio and Starz assets after the Hollywood studio considered strategic alternatives. The biggest asset for Lionsgate Studios will arguably be its vast library of movies and television franchises.

The SPAC transaction has been structured with the parent company eventually retaining 87.3 percent of the shares in Lionsgate Studios, while Screaming Eagle Acquisition Corp. will control the remaining 12.7 percent equity stake.

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