Screaming Eagle Acquisition filed an amended prospectus outlining its proposed merger with the Lionsgate studio business — a $4.6 billion deal and among the largest announced last year.
Terms call for the issuance of nearly 19.2 million shares to Lionsgate Studios, positioning the company as a platform-agnostic, pure play content company with a deep portfolio of franchise properties including The Hunger Games, John Wick, The Twilight Saga and Ghosts, a robust film and television production and distribution business, a leading talent management and production company and a deep film and television library.
As a result of the transaction, 87.3% of the total shares of Lionsgate Studios are expected to continue to be held by Lionsgate, while Screaming Eagle public shareholders and founders and common equity financing investors are expected to own the remaining 12.7% of the combined company. The transaction values Lionsgate Studios at an enterprise value of approximately $4.6 billion. Lionsgate Studios does not include the STARZ platform, which will continue to be wholly owned by Lionsgate.
There is a minimum $350 million cash condition to seal the deal. PIPE financing has been increased to $225 million from the $175 million already committed.
In connection with the closing, the SPAC’s sponsor and its transferees, as well as shareholders affiliated with the Lions Gate parent corporation will enter into a lock-up agreement on 50% of their shares (excluding options) for any 20 trading days within a period of 30 consecutive trading days beginning at least 30 days after the closing until the share price hits at least $12.50. The remaining remaining 50% of the lock-up shares would release on the date the stock reaches $15 per share, in each case at least 180 day after the deal closes.
The deal includes a proposal to pay warrant holders 50 cents for each warrant upon the closing of the business combination. Nearly 44.2% of warrant holders have already agreed to the measure, the SPAC said, although 50% support is required for the proposal to pass. The warrant agreement is contingent on approval of the business combination with the Lionsgate studio business.deals announced in 2023. Read more.
