Shares of Lions Gate Entertainment fell in afternoon trading after the media company said it plans to separate its studios business and merge it with a special-purpose acquisition company.
New York-listed class A shares of Lions Gate, also known as Lionsgate, fell 5%, to $10.61. The stock is still up 86% this year.
The company said the deal will value its studios business, which includes its production-and-distribution and talent-management business as well as portfolio of intellectual property, at $4.6 billion, including debt. The IP includes The Hunger Games, John Wick and The Twilight Saga, among others.
The studios business would merge with Screaming Eagle Acquisition, a blank-check firm, to form a new company called Lionsgate Studios.
Once the deal closes, Lionsgate would own about 87.3% of the studios business. Lionsgate will continue to separately own the Starz cable network and platform, known for original series including “Power” and “Outlander.”