Lionsgate has taken a step closer toward its planned separation of the studio from Starz, by filing official documents with the SEC to advance the process.
Notably, the company outlined its plan to separate into two publicly traded companies in an official S4 filing, which requires Securities and Exchange Commission (SEC) approval. Once the SEC declares the filing effective, the company can schedule a shareholder meeting to vote on the split, a move already approved by the board. While Lionsgate aims to finalize the transaction by the end of the year, the timeline could extend into early 2025, though only slightly.
The planned separation will result in a new entity, Lionsgate Studios, being spun off from the existing company, which will be renamed Starz Entertainment. According to the filing, the management teams for both entities will remain consistent, with no major changes expected. CEO Jon Feltheimer and Vice Chair Michael Burns will lead Lionsgate Studios, while Jeff Hirsch will continue as President and CEO of Starz.
However, for the newly named Starz Entertainment, a new detail in the filing includes a 15-to-1 reverse stock split. This means that every 15 common shares of Starz will be consolidated into a single share. Reverse stock splits are designed to decrease the total number of outstanding shares while increasing the share price proportionally.
Previously, Lionsgate initiated the separation of its film and TV studios business through a Special Purpose Acquisition Company (SPAC), paving the way for a formal split from Starz. This move enabled Lionsgate Studios to operate as an independent entity, securing a listing on NASDAQ.