Legendary Entertainment is apparently looking to acquire Lionsgate Studios which has just spun off on its own ticker on Wall Street.
Lionsgate split itself up, Starz going one way, Lionsgate Studios, the other so that the latter could be primed for acquisition.
We’re getting word that Moelis & Company investment bank is involved with the early talks here. What’s clear is that Lionsgate and Legendary are having conversation on a couple of feature co-productions. That’s bound to be the litmus test in regards to seeing how the two companies jam together, and whether a future marriage is in store.
Legendary Entertainment is the co-financier of such big franchises, largely at Warners, read Dune ($1.1 billion), the Monsterverse and this year’s A Minecraft Movie ($955.1M). Lionsgate is the studio behind such notable franchises as John Wick, The Hunger Games, Saw, Twilight, the Divergent series with some award winning titles in 20k-plus library, i.e. Monster’s Ball and La La Land. The company at the end of today’s trading day counts a market cap of $2 billion. Share prices surged 20% on the initial Bloomberg report.
Here’s the thing — whoever buys Lionsgate, you’re not getting 100% ownership of the library. The studio off-loads its foreign films in order to run a risk-free, ideally profit margin type of business. It’s the reason why Disney and Apple and everyone else hasn’t scooped up Lionsgate previously: They’d never own 100% . Consider that, Legendary. Or maybe it’s not a big deal for Legendary since they’re in the partial rights IP space, owning anywhere from 20%-50% of the movies they co-fund and co-produce.
The secret to Lionsgate’s success in a streaming-obsessed town where major studios laid billions on the line to launch their own OTT services is that they’ve remained an arms dealer in TV and film, a provider of content.
Lionsgate counts a staff of 1,400 around the globe. Legendary has 180 employees.
The Apollo backed Legendary was one of the suitors last year for Paramount Global before David Ellison’s Skydance Media LLC prevailed.
Bloomberg reports that Legendary CEO Josh Grode told the media outlet that plans are in the works to use Apollo’s monies toward entertainment industry takeovers in the billions of dollars range.
Legendary and Lionsgate declined to comment.
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