(Reuters) -Blank-check firm Screaming Eagle Acquisition Corp said on Friday it has agreed to merge with the studio business of entertainment company Lionsgate in a deal valued at about $4.6 billion, sending shares of both companies up before the bell.
The deal is expected to deliver about $350 million in gross proceeds to Lionsgate, including $175 million from a private investment in public equity and the remaining from the special purpose acquisition company’s (SPAC) trust account.
Shares of the SPAC rose 3.1% in premarket trading after the news, while those of the Lionsgate Studios parent climbed 2.5%.
The studio business holds a library of popular content, including “The Hunger Games”, “John Wick”, “The Twilight Saga” and “Ghosts”.
Lionsgate will own 87.3% of the total shares of Lionsgate Studios, while Screaming Eagle’s shareholders, founders and equity investors are expected to own about 12.7% of the combined entity. The deal is expected to close in the spring of 2024.
Also called blank-check firms, SPACs use proceeds from their initial public offerings (IPO) to merge with private firms. Such mergers allow the private firms to sidestep a lengthy IPO process to list their shares on bourses.
SPAC deals have largely fallen out of favor following a bumper run in 2020 and 2021, after they drew intense scrutiny from the U.S. Securities and Exchange Commission.
(Reporting by Manya Saini in Bengaluru; Editing by Pooja Desai)
