Lionsgate is facing new pressure from activist investor Anson Funds, which has taken a stake in the Hollywood studio and is asking the company to consider a range of options including a possible sale following its separation from Starz.
Anson, which is a Top 5 shareholder in Lionsgate Studios, believes the company is undervalued and that it would be an appealing takeover target for both traditional and digital media companies and tech startups, touting its revenue and content library, an individual familiar with the matter tells TheWrap. In addition to a sale, Anson says the company could consider divestitures of its unscripted television and 3 Arts businesses.
The individual, who has described the talks with Lionsgate as constructive and says the firm supports the company’s split from Starz, added that it should pursue alternative revenue streams such as merchandising and events like Broadway shows. Anson also wants Lionsgate to improve their financial disclosures.
“We always welcome the ideas and input of our shareholders,” a Lionsgate spokesperson told TheWrap. News of the stake was first reported by Bloomberg.
Lionsgate Studios, which encompasses its Motion Picture Group and the Television Studio segment as well as the company’s 20,000-plus title film and television library, began trading in May on the NASDAQ under the ticker symbol LION. Its stock price has fallen 27% since then to about $7.10 apiece during Wednesday’s trading session, giving it a market capitalization of $2.07 billion.
In November, the company filed an S-4 registration with the U.S. Securities and Exchange Commission as a next step towards splitting from Starz.
“We should get comments this week. We’ll probably turn that back, hopefully within a couple days — hopefully it’s a light response — and then we’ve got to go out to do a 30-day mailer to the shareholder base, and then we have to have a shareholder vote, and then we’re off and running,” Starz CEO Jeff Hirsch told UBS’ Media & Communications Conference on Tuesday when asked about the timing of the split. “So my sense is mid-January. It’s got to be before the end of January.”
Following the separation, Starz will trade on the NASDAQ under the ticker symbol STRZ and be rebranded as Starz Entertainment Corp. Lionsgate Studios Corp. will be owned by shareholders of both Lionsgate Entertainment Corp. and Lionsgate Studios.
