Studio Business of Lions Gate Entertainment Corp. (NYSE:LGF.A) executed a non-binding term sheet to acquire Screaming Eagle Acquisition Corp. (NasdaqGM:SCRM) (SEAC) for $2.6 billion in a reverse merger transaction on November 10, 2023. Studio Business of Lions Gate Entertainment Corp. entered into an agreement to acquire Screaming Eagle Acquisition Corp. for $2.6 billion in a reverse merger transaction on December 22, 2023. As part of transaction, consideration share paid equivalent to $2.677 billion at share price of $10.7 and assumed Lionsgate Studio net debt of $1.748 billion. Upon closing of the transaction, it is expected that Lionsgate shareholders will indirectly own an approximately 87.3% stake in Lionsgate Studios, while SEAC public shareholders, founders and PIPE investors will own approximately 5.7%, 0.7% and 6.3% of Lionsgate Studios, respectively. The resulting issue will be launched as Lionsgate Studios Corp. (?Lionsgate Studios?). Common shares of Lionsgate Studios will trade separately from Lionsgate?s Class A (LGF.A) and Class B (LGF.B) common shares as a single class of stock.

SEAC founders and independent directors will collectively forfeit approximately 14.5 million of their founder shares and will retain approximately 2.0 million common shares upfront and SEAC founders will be entitled to receive an additional 2.2 million common shares if the trading price of Lionsgate Studios common shares increases 50% from $10.70. In connection with the transaction, the Screaming Eagle founders will forfeit all of their Screaming Eagle private placement warrants. The transaction is subject to certain closing conditions, including regulatory approvals and approval from the shareholders and public warrant holders of SEAC. The transaction is also subject to obtaining final order of the Court, any waiting period (and any extensions thereof) under the HSR Act shall have expired or been earlier terminated, consideration shares shall have been accepted for listing on Nasdaq, the Registration Statement/Proxy Statement shall have been declared effective, all closing conditions to the PIPE Investment shall have been satisfied or waived and the PIPE Investment Amount shall have been received, the Pre-Closing Restructuring shall have occurred, and resignation of SEAC officers and directors. The board of directors of Lions Gate and SEAC have unanimously approved the transaction. SEAC Board formed the SEAC Transaction Committee, a committee comprised of two independent members of the SEAC Board, Amy Gershkoff Bolles and Isaac Lee, to, among other things, review the terms of the potential transaction. As on April 16, 2024, the registration statement on Form S-4 has been declared effective by the U.S. Securities and Exchange Commission. The general meeting of SEAC's shareholders will be held on May 7, 2024. On May 7, 2024, SEAC?s shareholders approved the transaction at the extraordinary general meeting of shareholders. The transaction is expected to close in the spring of 2024. As of May 13, 2024, Lionsgate Studios (NASDAQ:LION) is expected to launch on May 14, 2024. Net proceeds from the transaction will be used to enhance Lionsgate?s balance sheet and facilitate strategic initiatives including the eOne acquisition which is scheduled to close by calendar year end.

Morgan Stanley & Co. LLC is acting as financial advisor to Lionsgate. Citigroup Global Markets Inc. is acting as financial advisor to SEAC. Citigroup and Morgan Stanley are acting as co-placement agents for Screaming Eagle with respect to the common equity financing. David E. Shapiro and Helen A. Diagama of Wachtell, Lipton, Rosen & Katz are acting as legal advisors to Lionsgate and Denton?s Canada LLP is acting as legal advisor to Lionsgate in Canada. Joel Rubinstein, Jonathan Rochwarger, Morton Pierce and Neeta Sahadev of White & Case LLP are acting as legal advisors to SEAC and Goodmans LLP is acting as legal advisor to SEAC in Canada. White & Case LLP also provided due diligence services to SEAC. Citigroup Global Markets Inc. also provided extensive commercial and financial due diligence services to SEAC. Davis Polk & Wardwell LLP is acting as legal advisor to Citigroup and Morgan Stanley in connection with their roles as co-placement agents. Kroll, LLC, operating through its Duff & Phelps Opinions Practice, acted as financial advisor and fairness opinion provider to SEAC. Continental Stock Transfer & Trust Company acted as the transfer agent to SEAC. SEAC has engaged Morrow Sodali LLC to assist in the solicitation of proxies and will pay Morrow Sodali LLC an aggregate fee of $40,000 in connection with the SEAC meetings, consisting of a fee of $32,500 in connection with its role as proxy solicitor for the SEAC shareholders? meeting and a fee of $7,500 in connection with its role as proxy solicitor for the SEAC public warrantholders? meeting. in each case, plus disbursements. As compensation for Duff & Phelps? services in connection with the rendering of the fairness opinion to the SEAC Board, SEAC agreed to pay Duff & Phelps an aggregate fee of $575,000. Of this amount, $75,000 was payable as a retainer upon execution of the Business Combination Agreement, $100,000 was payable upon delivery of the fairness opinion, and $400,000 is payable upon consummation of the Business Combination.
Studio Business of Lions Gate Entertainment Corp. (NYSE:LGF.A) completed the acquisition of Screaming Eagle Acquisition Corp. (NasdaqGM:SCRM) (SEAC) in a reverse merger transaction on May 14, 2024. As a result of the transaction, 87.2% of the total shares of Lionsgate Studios are expected to be held by Lionsgate, while former Screaming Eagle public shareholders and founders and common equity investors are expected to own an aggregate of approximately 12.8% of the combined company.