In a significant development, Lionsgate and Screaming Eagle Acquisition Corp. have cleared a hurdle in their SPAC-style merger to launch Lionsgate Studios as a standalone public company. The U.S. Securities and Exchange Commission has declared the registration statement for the proposed merger effective. The merger is expected to close in early May, and Lionsgate Studios will be listed on NASDAQ under the ticker symbol LION. The parent company will retain 87.3% of the shares in Lionsgate Studios, while Screaming Eagle Acquisition Corp. will control the remaining 12.7% equity stake. The merger aims to provide Lionsgate Studios with more options before separating its film and TV studios and Starz. The newly merged entity will have the ability to raise fresh capital and explore potential mergers with existing businesses. This deal is seen as a way to unlock hidden shareholder value for the studio and Starz assets. The vast library of movies and television franchises will be Lionsgate Studios' biggest asset [e2e9c6c4].
In other news, Paramount and Skydance are in exclusive talks for a potential deal. David Ellison, founder of Skydance, met with Paramount's board of directors to discuss the deal. The deal being discussed would involve Skydance buying National Amusements and merging with Paramount. Other investors, including Apollo Global Management and Byron Allen, are also pursuing Paramount. Paramount's stock has fallen 18 percent this year. The ratings agency S&P Global downgraded Paramount's debt to junk last week [79cde676].
In February, S&P Global Ratings downgraded Paramount Global's credit rating to junk, citing a heavy debt load and weakness from streaming competition. The downgrade has led to lower bond prices and potential subordination for bondholders. A sale of Paramount is now more likely, and a cut to junk by even one agency before an acquisition would nullify a provision that would force a buyer to repay much of Paramount’s debt at a premium. Billionaire David Ellison's Skydance studio and Shari Redstone, the effective controller of Paramount, have reached a tentative agreement to sell her stake to Ellison and are in a 30-day period to discuss combining the businesses. Apollo Global Management has made a $26 billion offer to buy Paramount, which activist investor Barington Capital Group supports. Paramount has $13.5 billion in senior unsecured notes and the capacity to issue over $8 billion in secured debt. A second downgrade would make Paramount a fallen angel and migrate it to the high-yield index, increasing borrowing costs [80ac3916].
Endeavor Group Holdings Inc., the talent agency and controlling investor in WWE and the Ultimate Fighting Championship, has agreed to be acquired in a $13 billion buyout by the private equity group Silver Lake Management. The offer of $27.50 per share has been approved by an independent committee of Endeavor's board. Silver Lake, which already owns a controlling stake in Endeavor, is following through on plans announced in October to acquire the company. Endeavor had a market value of $11.8 billion when trading was halted [00d8712a].
Institutional investors have also increased their holdings in Endeavor Group Holdings. III Capital Management raised its holdings by 50.0% during the third quarter, now owning 142,466 shares of the company's stock. Vanguard Group Inc. increased its holdings by 29.4% in the third quarter, Morgan Stanley raised its holdings by 24.9% in the fourth quarter, BlackRock Inc. lifted its stake by 1,060.4% in the third quarter, JPMorgan Chase & Co. boosted its holdings by 53.6% in the second quarter, and Price T Rowe Associates Inc. MD increased its position by 74.5% in the fourth quarter. In total, institutional investors now own 43.70% of the company's stock [33fb68f9].
Endeavor, the talent and sports group, is going private after a less-than-satisfactory three-year stint on the stock market. Silver Lake, the company's main shareholder with a 71% stake, is bidding $13 billion, or $27.50 a share for the business. This acquisition marks one of the largest private equity takeovers in recent years. Silver Lake has pursued significant investments lately, including Qualtrics and Software AG [1a4792ef].
Guggenheim downgraded Endeavor Group Holdings Inc (NYSE:EDR) stock from Buy to Neutral and revised the price target to $27.50 from $36.00. The downgrade comes after Silver Lake, Endeavor's largest shareholder, reached an agreement to take the company private at $27.50 per share, representing a 55% premium over the unaffected share price. The acquisition has been recommended by a Special Committee of Endeavor's Independent Directors and approved by majority stockholders. The deal is expected to be finalized by the end of Q1 2025. The analyst noted that the one-year timeline for the deal's closure is likely linked to the gaming licenses held by Endeavor's subsidiary, OpenBet. TKO, which is not involved in the transaction, stands to benefit as it remains a publicly traded company. The analyst also mentioned that concerns about TKO's balance sheet being used for Endeavor's privatization were unfounded, and a capital return program for TKO could now be more probable [01773cbd].
Shari Redstone, the controlling shareholder of film and TV giant Paramount Global, has reached a tentative agreement to sell her stake in the company to David Ellison’s Skydance Media. Skydance is holding exclusive talks with a panel of independent directors at Paramount as part of a provisional accord to buy Redstone’s family holding company National Amusements, which holds a near 80% voting stake in Paramount. The potential terms of a deal couldn’t be determined, and any agreement would be subject to approval by Paramount’s board. Paramount has attracted other suitors, including independent media mogul Byron Allen, Apollo Global Management Inc., and Warner Bros. Discovery Inc. [f82e3ecf].
In a separate development, Blackhawk Capital Partners LLC has acquired a new position in shares of Consolidated Edison, Inc. during the 4th quarter, according to the company's 13F filing with the Securities and Exchange Commission. The fund acquired 17,052 shares of the utilities provider's stock, valued at approximately $1,551,000. Other institutional investors and hedge funds have also recently added to or reduced their stakes in the company.
Consolidated Edison, Inc. is a regulated electric, gas, and steam delivery business in the United States. The company reported $1.00 EPS for the quarter, beating the consensus estimate of $0.98. Consolidated Edison also announced a quarterly dividend of $0.83 per share, representing a boost from its previous dividend of $0.81. The stock is currently trading at $90.81 per share [bc5ba437].
David Ellison, movie producer and heir to a technology fortune, is in negotiations to take charge of Paramount Global, the media giant that owns CBS, MTV, and Nickelodeon. Ellison and his backers have agreed to pay a little more than $2 billion for Shari Redstone's National Amusements, the family company that controls Paramount. Ellison's production company, Skydance Media, would merge with Paramount as part of the deal. Redstone, with 77% ownership of Paramount's voting rights, will be getting a premium price for the shares held by National Amusements. Ellison would serve as CEO of the combined company, with his father Larry Ellison being considered for the role of chairman. Paramount's poor performance and declining market value have left Redstone with few options. Other potential buyers, including Apollo Global Management and Warner Bros. Discovery, have not materialized. Ellison and his supporters plan to invest billions of dollars in rebuilding Paramount and have already assessed which assets to hold or sell. They want to preserve the Paramount+ streaming service and explore merging it with a peer such as Peacock or Max. Shareholders will need to believe in a new management team's ability to grow the business, which has been in decline. Redstone sees Ellison as her best option due to his success as an entrepreneur and his commitment to investing in technology. [c14a5673].
Lionsgate and Screaming Eagle Acquisition Corp. have cleared a hurdle in their SPAC-style merger to launch Lionsgate Studios as a standalone public company. The registration statement for the proposed merger has been declared effective by the U.S. Securities and Exchange Commission. The merger is expected to close in early May, with Lionsgate Studios listing on NASDAQ under the ticker symbol LION. The parent company will retain 87.3% of the shares in Lionsgate Studios, while Screaming Eagle Acquisition Corp. will control the remaining 12.7% equity stake. The merger aims to give Lionsgate Studios options before separating its film and TV studios and Starz. The newly merged entity will be able to raise fresh capital and merge with existing businesses. The deal is seen as a way to uncover hidden shareholder value for the studio and Starz assets. Lionsgate Studios' biggest asset will be its vast library of movies and television franchises [e2e9c6c4].