Liberty Strategic Capital, a private equity fund led by former Secretary of the Treasury Steven Mnuchin, has acquired a significant 5.5% stake in entertainment company Lionsgate. The move comes as Lionsgate is preparing to finalize the acquisition of Entertainment One (eOne) and plans to divide its studio and streaming businesses.
The acquisition was revealed in a Securities and Exchange Commission (SEC) filing on Tuesday. According to the document, Liberty Capital purchased 4,594,863 shares of Lionsgate in multiple transactions between August 10 and August 30, with prices ranging from just over $7 a share to $7.46.
The SEC filing suggested that the upcoming separation of Lionsgate and Starz, expected to be completed in the first quarter of 2024, might have influenced the investment decision. Lionsgate has previously announced plans to spin off its studio business as a separate public entity, named LG Orion Holdings Inc., or "SpinCo."
The document also indicated that the new stakeholder may approach other shareholders, management, and board members of Lionsgate with "suggestions or proposals" on various issues. These could include a potential investment by the Reporting Persons in SpinCo, restructuring initiatives, assets and liabilities, business and financing alternatives, changes to the board of directors composition, or other matters relevant to their investment.
Mnuchin served as the 77th Secretary of the Treasury under former president Donald Trump from February 2017 through January 2021. He launched Liberty Strategic Capital later that year, with a focus on technology, financial services/Fintech, and "new content."
In response to the news of Liberty's stake acquisition, Lionsgate declined to comment. Following the announcement, Lionsgate shares saw an increase of more than 3% in after-hours trading.
Before his political career, Mnuchin was involved in Hollywood financing deals through partnerships such as RatPac-Dune Entertainment with Warner Bros., and Dune Entertainment which financed Fox films like “Black Swan,” “Love and Other Drugs” and “Prometheus.” His recent return to the industry with this substantial investment in Lionsgate marks a notable move within the sector.
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