Establishes One of the Largest Publicly Traded
Pure Play Content Companies with an Enterprise Value of
Approximately $4.6 Billion
Deal Expected to Raise Approximately
$350 Million of Total Gross
Proceeds
Upsized $175
Million in Committed PIPE (Private Investment in Public
Equity) Financing Led by Top Mutual Fund Investors
Transaction Enabled by Business Combination
with Screaming Eagle Acquisition Corp. (Nasdaq: SCRMU, SCRM,
SCRMW)
Common Shares of Lionsgate Studios Will
Trade as a Single Class of Stock Separately from Lionsgate Class A
and Class B Shares (LGF.A, LGF.B)
LOS
ANGELES, Dec. 22, 2023 /PRNewswire/ -- Screaming
Eagle Acquisition Corp. (Nasdaq: SCRMU, SCRM, SCRMW) ("Screaming
Eagle"), a publicly-traded company formed to merge with existing
businesses, today announced that it has entered into a definitive
agreement to combine with the Studio Business of Lionsgate (NYSE:
LGF.A, LGF.B), which comprises its Television Studio and Motion
Picture Group segments and one of the world's most valuable film
and television libraries, to launch Lionsgate Studios Corp.
("Lionsgate Studios").
The deal positions the standalone Lionsgate Studios as a
platform-agnostic, pure play content company with a deep portfolio
of franchise properties including The Hunger Games,
John Wick, The Twilight Saga
and Ghosts, a robust film and television production and
distribution business, a leading talent management and production
company and a world-class film and television library.
As a result of the transaction, 87.3% of the total shares of
Lionsgate Studios are expected to continue to be held by Lionsgate,
while Screaming Eagle public shareholders and founders and common
equity financing investors are expected to own an aggregate of
approximately 12.7% of the combined company. The transaction values
Lionsgate Studios at an enterprise value of approximately
$4.6 billion. Lionsgate Studios does
not include the STARZ platform, which will continue to be wholly
owned by Lionsgate.
In addition to establishing Lionsgate Studios as a standalone
publicly-traded entity, the transaction is expected to deliver
approximately $350 million of gross
proceeds to Lionsgate, including $175
million in PIPE financing already committed by leading
mutual funds and other investors. Net proceeds from the transaction
are expected to be used to enhance Lionsgate's balance sheet and
facilitate strategic initiatives, including those related to the
eOne business, which acquisition is scheduled to close by calendar
year end.
Common shares of Lionsgate Studios will trade separately from
Lionsgate's Class A (LGF.A) and Class B (LGF.B) common shares as a
single class of stock. The transaction is subject to certain
closing conditions, including regulatory approvals and approval
from the shareholders and public warrant holders of Screaming
Eagle, and is expected to close in the spring of 2024.
"This transaction creates one of the world's largest
publicly-traded pure play content platforms with the ability to
deliver significant incremental value to all of our
stakeholders," said Lionsgate CEO Jon
Feltheimer and Vice Chair Michael
Burns. "Coupled with the acquisition of the eOne platform
scheduled to close next week, the expansion of our partnership with
3 Arts and the strong performance of our content slates, we've put
together all of the pieces for a thriving standalone content
company with a strong financial growth trajectory."
"We are thrilled to be part of establishing Lionsgate Studios as
one of the only pure play content companies in the public markets,
which is well positioned to unlock value for both existing and new
shareholders," said Screaming Eagle CEO Eli
Baker. "We believe this will be seen as one of the most
innovative and value creating transactions the market has seen in
some time."
Transaction Details
The transaction is expected to deliver approximately
$350 million of gross proceeds to
Lionsgate, consisting of $175 million
in gross proceeds from a committed PIPE and $175 million in proceeds from the Screaming Eagle
trust. Net proceeds from the transaction will be used to enhance
Lionsgate's balance sheet and facilitate strategic initiatives
including the eOne acquisition which is scheduled to close by
calendar yearend.
Due to tax and other considerations, Lionsgate Studios has made
it a condition of the transaction to receive not more than
$175 million of gross trust proceeds.
In the event that unredeemed amounts exceed $175 million, such non-redeeming shareholders
will receive a mix of consideration in the form of shares in
Lionsgate Studios and cash (from Screaming Eagle) (as cash value in
trust), pro-rata with all other non-redeeming shareholders
(excluding PIPE investors and those investors committing to
non-redemption arrangements).
It is also a condition of closing that all of Screaming Eagle's
public and private placement warrants be eliminated. Screaming
Eagle private placement warrants will be eliminated for no
consideration. Screaming Eagle's public warrants will be
repurchased for $0.50 per warrant
from warrant holders pursuant to one of the voting proposals
associated with the business combination. Screaming Eagle has
obtained the written consent from warrant holders owning
approximately 44.19% of all public warrants outstanding to vote in
favor of the public warrant repurchase. For all public warrants to
be compulsorily acquired for $0.50
per warrant, an additional 5.81% is required to be obtained prior
to the voting date for the business combination.
Upon closing of the transaction, it is expected that Lionsgate
shareholders will indirectly own an approximately 87.3% stake in
Lionsgate Studios, while Screaming Eagle public shareholders,
founders and PIPE investors will own approximately 5.7%, 0.7% and
6.3% of Lionsgate Studios, respectively. Screaming Eagle founders
and independent directors will collectively forfeit approximately
14.5 million of their founder shares and will retain approximately
2.0 million common shares upfront and Screaming Eagle founders will
be entitled to receive an additional 2.2 million common shares if
the trading price of Lionsgate Studios common shares increases 50%
from $10.70. In connection with the
transaction, the Screaming Eagle founders will forfeit all of their
Screaming Eagle private placement warrants.
Lionsgate is expected to maintain its current corporate debt
structure in this transaction.
Morgan Stanley & Co. LLC ("Morgan Stanley") is acting as
financial advisor to Lionsgate. Citigroup Global Markets Inc.
("Citigroup") is acting as financial advisor to Screaming Eagle.
Citigroup and Morgan Stanley are acting as co-placement agents for
Screaming Eagle with respect to the common equity financing.
Wachtell, Lipton, Rosen & Katz is acting as legal advisor to
Lionsgate and Denton's Canada LLP is acting as legal advisor
to Lionsgate in Canada. White
& Case LLP is acting as legal advisor to Screaming Eagle
and Goodmans LLP is acting as legal advisor to Screaming Eagle in
Canada. Davis Polk &
Wardwell LLP is acting as legal advisor to Citigroup and Morgan
Stanley in connection with their roles as co-placement agents.
Lionsgate senior management will hold a call to discuss the
transaction on Thursday, January 4,
at 5:00 PM ET/2:00 PM PT. Interested parties may listen to the
live webcast by visiting the events page on the Lionsgate Investor
Relations website or via the following link. A
full replay will become available the evening of January 4 by clicking the same link. Answers to
Frequently Asked Questions can be found as Exhibit 99.3 to our
Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 22, 2023.
About Screaming Eagle
Screaming Eagle Acquisition Corp. is a special purpose
acquisition company established for the purpose of effecting a
merger, capital share exchange, asset acquisition, share purchase,
reorganization or similar business combination with one or more
businesses. Screaming Eagle's sponsor is Eagle Equity Partners V,
LLC, of which Harry Sloan,
Jeff Sagansky and Eli Baker are Managing Members who have together
sponsored seven prior SPAC transactions. Screaming Eagle's
management team has extensive experience in identifying and
executing strategic investments globally and has done so
successfully in a number of sectors, including TMT.
For further information, investors should contact:
MEDIA CONTACT:
Jeff Pryor/Priority PR
e. jeff@prioritypr.net
INVESTOR CONTACT:
Ryan O'Connor
t. (424) 284-3519
e. roconnor@eaglesinvest.com
Additional Information About the Transaction and Where to
Find It
In connection with the transaction, a subsidiary of Screaming
Eagle ("New Screaming Eagle") intends to file with the U.S.
Securities and Exchange Commission (the "SEC") a registration
statement on Form S-4 (the "Registration Statement"), which will
include a preliminary proxy statement of Screaming Eagle and a
preliminary prospectus of New Screaming Eagle, and after the
Registration Statement is declared effective, Screaming Eagle will
mail the definitive proxy statement/prospectus relating to the
transaction to its shareholders and public warrant holders as of
the respective record date to be established for voting at the
meeting of its shareholders (the "Screaming Eagle Shareholders
Meeting") and public warrant holders ("Screaming Eagle Public
Warrant Holder Meeting") to be held in connection with the
transaction. The Registration Statement, including the proxy
statement/prospectus contained therein, will contain important
information about the transaction and the other matters to be voted
upon at the Screaming Eagle Shareholders Meeting and Screaming
Eagle Public Warrant Holder Meeting. This communication does not
contain all the information that should be considered concerning
the transaction and other matters and is not intended to provide
the basis for any investment decision or any other decision in
respect of such matters. Screaming Eagle, New Screaming Eagle and
Lionsgate may also file other documents with the SEC regarding the
transaction. Screaming Eagle's shareholders, public warrant holders
and other interested persons are advised to read, when available,
the Registration Statement, including the preliminary proxy
statement/prospectus contained therein, the amendments thereto and
the definitive proxy statement/prospectus and other documents filed
in connection with the transaction, as these materials will contain
important information about Screaming Eagle, New Screaming Eagle,
Lionsgate, Studio Business and the transaction.
Screaming Eagle's shareholders, public warrant holders and other
interested persons will be able to obtain copies of the
Registration Statement, including the preliminary proxy
statement/prospectus contained therein, the definitive proxy
statement/prospectus and other documents filed or that will be
filed with the SEC, free of charge, by Screaming Eagle, New
Screaming Eagle and Lionsgate through the website maintained by the
SEC at www.sec.gov.
Participants in the Solicitation
Screaming Eagle, New Screaming Eagle, Lionsgate and their
respective directors and officers may be deemed participants in the
solicitation of proxies of Screaming Eagle shareholders and public
warrant holders in connection with the transaction. More detailed
information regarding the directors and officers of Screaming
Eagle, and a description of their interests in Screaming Eagle, is
contained in Screaming Eagle's filings with the SEC, including its
Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC
on March 1, 2023, and is available
free of charge at the SEC's website at www.sec.gov. Information
regarding the persons who may, under SEC rules, be deemed
participants in the solicitation of proxies of Screaming Eagle's
shareholders and public warrant holders in connection with the
transaction and other matters to be voted upon at the Screaming
Eagle Shareholders Meeting and SEAC Public Warrant Holders Meeting
will be set forth in the Registration Statement for the transaction
when available.
Forward-Looking Statements
This communication includes certain statements that may
constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act, and Section 21E of the Exchange
Act. Forward-looking statements include, but are not limited to,
statements that refer to projections, forecasts or other
characterizations of future events or circumstances, including any
underlying assumptions. The words "anticipate," "believe,"
"continue," "could," "estimate," "expect," "intends," "may,"
"might," "plan," "possible," "potential," "predict," "project,"
"seek," "should," "target," "would" and similar expressions may
identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking.
Forward-looking statements may include, for example, statements
about the Screaming Eagle or Lionsgate's ability to effectuate the
transaction discussed in this document; the benefits of the
transaction; the future financial performance of Lionsgate Studios
(which will be the go-forward public company following the
completion of the transaction) following the transactions; changes
in Lionsgate's strategy, future operations, financial position,
estimated revenues and losses, projected costs, prospects, plans
and objectives of management. These forward-looking statements are
based on information available as of the date of this document, and
current expectations, forecasts and assumptions, and involve a
number of judgments, risks and uncertainties. Accordingly,
forward-looking statements should not be relied upon as
representing Screaming Eagle, Lionsgate or New Screaming Eagle's
views as of any subsequent date, and none of Screaming Eagle,
Lionsgate or New Screaming Eagle undertakes any obligation to
update forward-looking statements to reflect events or
circumstances after the date they were made, whether as a result of
new information, future events or otherwise, except as may be
required under applicable securities laws. Neither New Screaming
Eagle nor Screaming Eagle gives any assurance that either New
Screaming Eagle or Screaming Eagle will achieve its expectations.
You should not place undue reliance on these forward-looking
statements. As a result of a number of known and unknown risks and
uncertainties, New Screaming Eagle's actual results or performance
may be materially different from those expressed or implied by
these forward-looking statements. Some factors that could cause
actual results to differ include: (i) the timing to complete the
transaction by Screaming Eagle's business combination deadline and
the potential failure to obtain an extension of the business
combination deadline if sought by Screaming Eagle; (ii) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the definitive agreements relating
to the transaction; (iii) the outcome of any legal, regulatory or
governmental proceedings that may be instituted against New
Screaming Eagle, Screaming Eagle, Lionsgate or any investigation or
inquiry following announcement of the transaction, including in
connection with the transaction; (iv) the inability to complete the
transaction due to the failure to obtain approval of Screaming
Eagle's shareholders or Screaming Eagle's public warrant holders;
(v) Lionsgate's and New Screaming Eagle's success in retaining or
recruiting, or changes required in, its officers, key employees or
directors following the transaction; (vi) the ability of the
parties to obtain the listing of Lionsgate Studios' Common Shares
on a national securities exchange upon the date of closing of the
transaction; (vii) the risk that the transaction disrupts current
plans and operations of Lionsgate; (viii) the ability to recognize
the anticipated benefits of the transaction; (ix) unexpected costs
related to the transaction; (x) the amount of redemptions by
Screaming Eagle's public shareholders being greater than expected;
(xi) the management and board composition of Lionsgate Studios
following completion of the transaction; (xii) limited liquidity
and trading of Lionsgate Studios' securities following completion
of the transactions; (xiii) changes in domestic and foreign
business, market, financial, political and legal conditions, (xiv)
the possibility that Lionsgate or Screaming Eagle may be adversely
affected by other economic, business, and/or competitive factors;
(xv) operational risks; (xvi) litigation and regulatory enforcement
risks, including the diversion of management time and attention and
the additional costs and demands on Lionsgate's resources; (xvii)
the risk that the consummation of the transaction is substantially
delayed or does not occur; and (xix) other risks and uncertainties
indicated from time to time in the Registration Statement,
including those under "Risk Factors" therein, and in the other
filings of Screaming Eagle, New Screaming Eagle and Lionsgate with
the SEC.
No Offer or Solicitation
This communication does not constitute (i) a solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the transaction or (ii) an offer to sell, a
solicitation of an offer to buy, or a recommendation to purchase,
any securities of Lionsgate, Screaming Eagle, the combined company
or any of their respective affiliates. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended, or an exemption therefrom, nor shall any sale of
securities in any states or jurisdictions in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction be
affected. No securities commission or securities regulatory
authority in the United States or
any other jurisdiction has in any way passed upon the merits of the
transaction or the accuracy or adequacy of this communication.
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SOURCE Screaming Eagle Acquisition Corp.