Washington PE firm Liberty Strategic Capital acquires minority stake in Lionsgate
Liberty Strategic Capital, a private equity company located in Washington DC, has recently obtained a 5.5% ownership of the Class A voting shares of Lionsgate. Lionsgate is a renowned studio group in the United States that is responsible for successful productions like Mad Men and Nurse Jackie, as well as being the owner of popular cable network Starz.
A recently established investment company, launched this year, is dedicated to financing ventures in tech, financial services, fintech, and innovative content. Guided by Steven Mnuchin, the ex-Secretary of the US Treasury during the presidency of Donald Trump, this private equity firm aims to make noteworthy strides in these industries.
The Liberty Strategic Capital, unrelated to Liberty Global owned by John Malone, has obtained Class A shares valued at approximately US$30.8m. Lionsgate offers two types of stock, A and B, with a combined market capitalization of US$1.79bn. Through this investment, Liberty Strategic Capital has acquired around 1.7% ownership in Lionsgate.
Lionsgate revealed the investment in a document submitted to the authorities yesterday. Although the exact purpose of the investment was not revealed, the document refers to the anticipated split between Lionsgate and Starz as a matter of potential curiosity.
According to the document submitted, Liberty Strategic Capital has expressed their desire to communicate with stakeholders, management, or the board of directors at Lionsgate. They aim to offer recommendations or ideas on several matters that include a possible investment by Liberty Strategic Global in the spin-off of Lionsgate's studio business, along with other aspects such as restructuring, assets and liabilities, business and financing options, the composition of the board of directors, and any other relevant topics.
In the previous month, Lionsgate once more pushed back the planned separation. If the separation is finalized, it would result in Lionsgate's film and TV studio forming a new independent company, while the media networks business (mainly Starz's pay TV and streaming activities) would remain within the current firm. This decision to divide the companies occurs after Lionsgate purchased Starz approximately seven years ago for about US$4.4bn.
Lionsgate pointed to the double blows suffered by Hollywood and the upcoming completion of the Entertainment One acquisition, which is anticipated before the year concludes, as the justifications for yet another postponement of the split.
Prior to becoming part of the Trump administration in 2017, Mnuchin worked as a significant contributor in the film industry, investing in multiple movie projects in collaboration with companies like Warner Bros and Fox. He held the position of executive producer for various films, notably Wonder Woman, King Arthur: Legend of the Sword, Mad Max: Fury Road, Edge of Tomorrow, and The Conjuring 2.
A spokesperson from Lionsgate chose not to provide any information regarding the investment.