Lionsgate Plans Exchange Agreement for $383M in Senior Notes to Facilitate SPAC Deal

Lions Gate Entertainment announced that it has entered into an Exchange Agreement with Lions Gate Capital Holdings 1, Lions Gate Capital Holdings and certain holders of its 5.5% Senior Notes due 2029. Under the terms of the agreement, approximately $383 million in aggregate principal amount of the Existing Notes will be exchanged for New Notes to be issued by Lions Gate Capital Holdings 1.

The New Notes will facilitate the anticipated full separation of the company’s Studio Business and STARZ Business. Prior to the anticipated separation, the New Notes will bear interest at a rate of 5.500% per year and mature in 2029. Upon separation, the New Notes will be part of the Studio Business capital structure, bear interest at a rate of 6.000% per year and have their maturity extended to 2030.

The holding company intends to spin off its Lionsgate Studio business in a merger with Screaming Eagle Acquisition. Screaming Eagle shareholders are expected to vote May 7 on the $4.6 billion deal.

Common shares of Lionsgate Studios will trade separately from Lionsgate’s Class A (LGF.A) and Class B (LGF.B) common shares as a single class of stock. The transaction is expected to close in the spring, pending approvals.

Screaming Eagle raised $750 million in a January 2022 IPO.

The SPAC has $225 million in PIPE funding to support the transaction. There is a minimum $350 million cash condition to seal the deal. 

The acquisition positions the standalone Lionsgate Studios as a platform-agnostic, pure play content company with a deep portfolio of franchise properties including The Hunger GamesJohn 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. Read more.


Related Posts