Artisan in bid for Lions Gate
Canuck indie shares jump nearly 9% on news
A source close to Lions Gate, however, noted that the Canadian indie isn't favorably disposed to any offer in which Artisan would emerge as the acquiring company.
Artisan and Lions Gate spokesmen both declined comment.
If such a deal took place, Artisan would become the majority shareholder in the combined entity, which would most likely retain Lions Gate's public listing on the American Stock Exchange. Lions Gate, which is based in Vancouver and Los Angeles, is also traded in Toronto.
While Lions Gate entered discussions about buying Artisan earlier this year, Lions Gate is now said to be only the first target for Artisan, which is moving into acquisition mode after scuttling its plans for an IPO and not finding a buyer at a price it liked.
The overall price would be in line with what Lions Gate bid for Artisan, but the cash component would be a bit higher than the $50 million or so Lions Gate offered. (The rest of the Lions Gate offer had been in warrants.) Lions Gate is wary of overspending on another major acquisition after garnering criticism for paying more than $50 million for Trimark last October.
Lions Gate stock, which hit a 42-week low of $1.31 late last year, jumped nearly 9% to $2.83 on takeover speculation Monday.
Wall Streeters said any deal could take about 10 weeks to close and predicted it won't be the last for Artisan. "They've decided to invest in the company and build it. This is a logical first step, and there will be others," one said.
Meanwhile, this deal would give both companies some needed heft. Artisan has a big library and homevid business, but its film slate has been withering.
"There are some very talented people (at Lions Gate). You would want to try and integrate (CEO and former Sony exec) Jon Feltheimer. The rest would be on a case-by-case basis," said one Wall Streeter.
In March, Artisan informed the Securities and Exchange Commission that it was scrapping plans for an IPO due to unfavorable market conditions. In a recent lawsuit filed against U.K. insurer Royal & Sun and other parties, Artisan blamed the scuttled IPO on failed commitments to help finance its film slate. People close to Artisan also said that it wanted free rein to consider proposals from outside parties to buy the company.
(Carl DiOrio in Los Angeles contributed to this article.)
