Shares of Lions Gate Entertainment Corp. (LGF.B, +3.66% LGF.A, +4.10%) surged 7.4% in premarket trading on Friday, reaching a 19-month high. The movie production and TV programming company revealed a significant development: its studios business will soon become a separately traded public company.
In an exciting move, Screaming Eagle Acquisition Corp. (SCRM, -0.56%), a special purpose acquisition company, has agreed to merge with Lionsgate’s thriving studio business. This deal encompasses the TV studio and motion picture group under Lionsgate’s umbrella, excluding the Starz platform. The overall valuation of Lionsgate Studios is estimated at an impressive $4.6 billion.
Upon the merger’s completion, which is projected to take place in spring 2024, Lionsgate will retain a majority ownership of an impressive 87.3% of Lionsgate Studios Corp. Meanwhile, shareholders of Screaming Eagle will possess the remaining 12.7%. Moreover, Lionsgate anticipates receiving proceeds of $350 million from this strategic merger.
Throughout this year, the shares of Lionsgate have skyrocketed by a remarkable 93.2%, demonstrating their enduring success in the entertainment industry. In comparison, the S&P 500 index (SPX, +1.03%) has rallied by 23.6%.
This groundbreaking deal not only solidifies Lionsgate’s position as a major player in the industry but also opens up new avenues for growth, expansion, and further success in the coming years.
