In recent earnings calls and conferences, Lionsgate CEO Jon Feltheimer and Vice Chairman Michael Burns have reportedly made it clear that the studio isn’t just willing but eager to sell its film and television studio.
Tuna Amobi, director and senior equity analyst at CFRA Research, says: “Now more than ever Lionsgate will be willing to entertain any kind of serious bid for the company…to be a more formidable player in this media and entertainment landscape, you need to have the scale to do so.”
Last year Lionsgate came close to being acquired by toymaker Hasbro before talks broke down over pricing. It’s a shift in strategy for the company who famously acquired others in its two-decade run including the likes of Summit Entertainment, Starz, Artisan and Trimark.
However, we’re now in the age of the entertainment mega-deals and industry-wide consolidation as traditional studios are becoming increasingly redundant in an era of multinational media conglomerates aiming to streamline and expunge middlemen taking their slice in favor of digital pipelines direct to the consumer.
Adding fuel to the fire is President Trump’s one-time repatriation tax amnesty which is giving corporate giants many billions which they need to spend. The only damper, of course, is potential antitrust issues with the outcome of The Department of Justice’s recent lawsuit to block AT&T’s $85 billion bid for Time Warner likely to have a big impact on deals of this type.
Despite its relative size, Lionsgate is increasingly becoming a small player in this field which puts it at a competitive disadvantage. However, its library of 16,000 film and television titles does make it an attractive target, as does its relatively cheap market cap of $6 billion. The likes of Sony, Facebook, Apple, Amazon or Netflix have been speculated as suggested places where it could end up.