Lionsgate to Take Starz Stake, Adds John Malone to Board
Malone, in return, will get a stake in Lionsgate in the stock exchange deal, but remains Starz's largest shareholder.
Lionsgate is taking a stake in Starz as it gets into business with Liberty Media boss John Malone.
Lionsgate on Wednesday unveiled a stock exchange deal with affiliates of Malone that will see the mini-studio exchange 3.43 percent of its common stock for 4.51 percent of stock in Starz. Lionsgate's stake will carry 14.5 percent of the voting power at Starz. Malone will remain Starz's largest voting shareholder, holding around 6.1 percent of equity and around 32.1 percent of the voting power.
Once the transaction is completed, Malone will join Lionsgate's board. "Lionsgate has emerged as a leader in developing global content, and this transaction creates the potential for a number of strategic opportunities around the world with them," the Liberty Media head said in a statement.
The stock exchange deal follows speculation that Starz has been looking to sell itself to a bigger company or find a strategic partner.
Lionsgate CEO Jon Feltheimer and vice chairman Michael Burns hailed Malone as a pioneer in content distribution and said they looked forward to exploiting their new stake in the premium cable channel. "We see tremendous value in Starz as well as the potential to explore a broad range of strategic initiatives in the future," they said in their own statement.
Starz CEO Chris Albrecht, who has partnered with Lionsgate on content deals in the past, welcomed the support for his business plan from the mini-studio. "We have tremendous respect for the business they have built and their leadership position in the entertainment industry," the Starz chief said in a statement.
Lionsgate three years ago signed a long-term library deal with Starz to cover film titles such as The Expendables and Red State.