Lionsgate moves on Oz's Magna
EmptySYDNEY -- Lionsgate Australia, the local subsidiary of Canadian-based distributor Lionsgate, made a takeover offer for Australia's largest independent home entertainment distributor, Magna Pacific Ltd., on Thursday.
Lionsgate is offering AUS32 cents (25 cents) a share for the Magna stock it doesn't already own, a 42% premium on Magna's closing share price last week. Lionsgate previously acquired a 11.23% stake in the DVD distributor from its largest shareholder, Macquarie Private Portfolios.
The move follows Lionsgate's announcement that it will distribute its own films in Australia, becoming a major competitor to Magna, which has distributed key Lionsgate titles.
"Lionsgate Australia notes that the bid reflects Lionsgate's continuing commitment to filmed entertainment self-distribution in key international territories," the company, which acquired U.K. distributor Redbus Films in October 2005, said in a statement.
Magna Pacific, which has a library of about 1,000 titles, recently moved into theatrical distribution, with features "Becoming Jane," Just Friends" and "Perfect Creatures" on its upcoming release slate. Four of Magna's top-selling DVD titles -- "Dirty Dancing," "Young Guns," "Reservoir Dogs" and "The Princess Bride" -- are Lionsgate films.
Lionsgate Australia chairman Simon Franks said in a statement that the offer provides "substantial value" to Magna shareholders.
"Lionsgate has been involved with Australian filmed content for many years and we are committed to extending that involvement," Franks said. "We believe that the offer is extremely attractive for a business which has performed poorly over recent years, with earnings per share having declined 53% and margins down 44%. The premium being offered is at the higher end of the acquisition premiums in the Australian market over the last year."
Comment from Magna Pacific was not available at press time.