China's Alibaba Reportedly Eyeing 37 Percent Stake in Lionsgate
The Chinese e-commerce giant, led by chairman Jack Ma, is looking to buy chairman Mark Rachesky's stake
Mark Rachesky, whose 37.4 percent stake in Lionsgate in 2011 denied Carl Icahn a win in his proxy fight, could be looking to sell his investment in the Hollywood mini-studio to Chinese e-commerce giant Alibaba, led by chairman Jack Ma.
The New York Post reported on Friday that hedge fund manager Rachesky, the chairman of Lionsgate and its biggest shareholder, is looking to unload his influential stake in the mini-studio, with Ma in line to possibly buy it.
"We would expect Rachesky to command a premium for the de facto 37.4 percent control position. The activity reinforces recognition of Lionsgate's fairly unique position as a content engine outside the large media companies," wrote Matthew Harrigan, an analyst at Wunderlich Securities, in a note to investors on Friday following the Alibaba-Lionsgate report.
Lionsgate has been one of Ma's stops in Hollywood as he reportedly meets with studios to acquire online content and possibly ownership stakes. The Alibaba billionaire has also met with Walt Disney, Paramount Pictures, Warner Bros., Sony and Universal.
Ma is flush with cash after a record-breaking Alibaba stock listing in September valued the company at an estimated $25 billion and with a market value of roughly $230 billion.
Lionsgate earlier this year also partnered with Alibaba to launch a streaming service in China to distribute titles like Divergent and The Twilight Saga: Eclipse and TV shows such as Mad Men, Weeds and The Royals.
A Lionsgate spokesman declined comment on the press report. Alibaba couldn't be reached.
Updated Oct. 24, 10:30 am Added details on Lionsgate declining comment.