Lionsgate Closes on Studio-Starz Split

lion gate One step closer to the planned split of the studio starz Today, the SEC has a filing that officially flags its plans.

The long-in-the-making transaction to create two separate publicly traded companies is outlined in a formal S4 document that, barring further questions or clarification, should be declared effective by the Securities and Exchange Commission. The company may then set a date for a shareholders’ meeting to vote on the spin-off, which is approved by the board of directors. The idea was to complete the move by the end of the year, and Lionsgate is largely on track. The process may shift to 2025, but not by much.

will see a new company called Lionsgate Studios He left the former Lionsgate, which will be renamed Starz Entertainment. The management teams for both are surprisingly not revealed in today’s filing; the same managers who run businesses now will run them after the split; Studios is led by CEO Jon Feltheimer, executive vice presidents Michael Burns, and Starz president Jeff Hirsh.

One of the new elements emerging is a 1-for-15 reverse stock split in the new Starz Entertainment; This means that every 15th of Starz common shares will be combined. A reverse stock split reduces the number of shares outstanding and increases the share price in the process.

As the media industry, particularly linear television, reshapes, more assets are coming into play. The split will create two smaller companies that could be acquired or merged with another.

On a much larger scale, Comcast announced plans to spin off most of its NBCUniversal cable networks into a new, independent public company. The plan there isn’t necessarily to sell, but to allow investments in the cable networks business that might not be appetizing for Comcast shareholders.

The rationale is similar. Lionsgate reiterated today that its move is “to enable the two companies to more effectively pursue their distinct operating priorities and strategies and focus on strengthening their core businesses, allocating financial resources to meet the unique needs of their respective businesses, and more effectively articulating a clear . investment thesis as a pure-play content studio and platform companies.