Liberty Global and Discovery Communications each have agreed in principle to purchase 5 million shares of Lionsgate, resulting in each having an approximately 3.4 per cent shareholding of Lionsgate’s current outstanding shares.
Liberty Global and Discovery Communications will each pay approximately $195 million for their respective stakes in Lionsgate. Additionally, Liberty Global and Discovery Communications will each have one designee appointed to Lionsgate’s Board of Directors — President and CEO Mike Fries for Liberty Global and President and CEO David Zaslav for Discovery Communications. Liberty Global and Discovery Communications are each entering into separate commercial agreements with Lionsgate providing for a preferred partner relationship with respect to licensing rights for certain theatrical and television content across their markets.
“We’re very enthusiastic about this alliance with Lionsgate, and I’m pleased to join Chairman Mark Rachesky and the rest of the Lionsgate Board,” said Fries. “The company is a unique success story in the entertainment industry. Lionsgate is led by an incredible management team and they’ve created one of the deepest portfolio of brands and franchises in the industry. This strategic content investment will also create opportunities for Lionsgate to become an even more important supplier of high-end premium content to our 24 million video and 18 million broadband subscribers.”
“One of Discovery’s advantages is our ownership in a diverse portfolio of global content and IP, which uniquely positions the company to deliver an audience across multiple media ecosystems,” said Zaslav. “Lionsgate has created a strong television business and we are proud to take this ownership stake to gain access to terrific storytellers, creative leadership, and global formats and IP, in both nonfiction and scripted programming. As with all of our creative partners, we look forward to telling world-class stories with Jon and the deep management team at Lionsgate, and further strengthening Discovery’s content pipeline across our linear and digital platforms around the world.”
“David and Mike are highly accomplished and respected executives who will bring added depth and vision to our Board of Directors,” said Dr. Mark Rachesky, Chairman and largest shareholder of Lionsgate. “I was a very early believer in the value of content, and these new strategic relationships with two of the pre-eminent programming and distribution platforms in the world help position us to take the Company to the next level.”
“This transaction aligns Lionsgate with two of the most visionary players in the global marketplace, and we’re delighted to add David and Mike’s experience and expertise to our Board of Directors,” said Lionsgate CEO Jon Feltheimer and Vice Chairman Michael Burns. “We believe that this agreement creates tremendous strategic opportunities to grow our content initiatives around the world and positions us to generate significant incremental value for our shareholders.”
A designee of MHR Fund Management, MHR principal and investment committee member Emily Fine, also will join the Board. Frank Giustra, who has served a total of 11 years on the Board, will step down.
“We’re pleased to welcome MHR’s Emily Fine, with whom we have worked closely over the past 10 years, to our Board,” continued Feltheimer and Burns. “We would also like to thank Frank Giustra, the founder of Lionsgate and a guiding force during our Company’s evolution, for his many years of valuable service.”