Lionsgate to Eliminate Studio’s Dual-Class Share Structure

Lionsgate is moving ahead with a plan to collapse its dual-class share structure into a single class of stock by offering a 12 percent premium to class A voting shareholders.

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The studio, led by CEO Jon Feltheimer, in an SEC filing on Monday said a special committee of the board explored ending the dual-class voting structure ahead of a spinoff of its studio business, and that Lionsgate’s board of directors approved the proposed plan at a meeting on July 25.

Company shareholders will now get a chance to vote on a one share, one vote structure as part of a proxy/registration statement to be filed later this year by Lionsgate around a proposed separation of its studio business and Starz. The Hunger Games and John Wick studio is betting that creating two stand-alone companies by launching a new public company out of a current public company can help value the Starz and studio assets separately and more generously than the current consolidated valuation.

To that end, Lionsgate’s standalone film and TV studio business, Lionsgate Studios, has begun trading on the NASDAQ Exchange separate from the major studio’s Starz business and under the ticket symbol LION. Lionsgae expected to raise $350 million in proceeds from that corporate move.

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Launching Lionsgate Studios on NASDAQ aimed to give the Hollywood studio options before completing a long-awaited separation of the film and TV studios and Starz, including raising fresh capital and merging with existing businesses.

Lionsgate Studios is made up of Lionsgate’s Motion Picture Group and Television Studio business, along with a 20,000-strong film and TV library.

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