Seven Arts Entertainment Inc (SAPX)

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Lights, camera, SPACtion: Lionsgate Studios to premiere on markets in a $4.7 billion deal - May 8, 2024

Screaming Eagle Acquisition (SCRM) shareholders voted on the SPAC’s proposed merger with Lionsgate Studios, the studio business of Lions Gate Entertainment (NYSE: LGF/A), on Tuesday, May 7. The merger values Lionsgate Studios at an enterprise value of $4.7 billion and, if approved, the combined company will trade under the ticker “LION”. While de-SPACs over the past 12 months have averaged a -59% return, Lionsgate Studios stands out for its multi-billion dollar valuation, scale ($2.9B in sales), and public parent. Screaming Eagle Acquisition’s stock finished at $11.44 on Tuesday, May 7.

It’s unusual for a public company to list its primary business via SPAC, particularly since the new company is set to have roughly the same value as the parent does now, though management clearly believes it can unlock value by listing the stronger studio business separately from the weaker media networks unit (Starz), while using SPAC and PIPE proceeds to pay down its high debt.

Transaction Details
In December 2023, Screaming Eagle Acquisition and Lionsgate Studios announced their business combination in a deal that valued Lionsgate Studios at...

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