Lions Gate near deal for Twilight studio
Lions Gate Entertainment Corp is nearing a deal to buy Twilight movie producer Summit Entertainment for about $400 million, two people familiar with the matter said on Sunday.hollywood Updated: Jan 09, 2012 19:15 IST
Lions Gate Entertainment Corp is nearing a deal to buy Twilight movie producer Summit Entertainment for about $400 million, two people familiar with the matter said on Sunday.
The agreement under discussion would have movie and TV producer Lions Gate pay about $350 million in cash and $50 million in stock for privately held Summit, one of the sources said. About $300 million in Summit debt would remain with Summit and off the Lions Gate balance sheet, the source said.
The deal is not complete, and there is still a chance no agreement will be reached, both sources said. An announcement could come as soon as this week.
Summit's chief executive, Rob Friedman, and co-Chairman Patrick Wachsberger re-launched Summit in 2007 as a full-service movie studio, expanding from its roots as a company primarily devoted to the foreign sales of movies.
The pair earned success with the Twilight vampire romance series that is hugely popular among teen girls. The first four movies in the series have sold nearly $2.5 billion in tickets around the world. The fifth and final Twilight film is scheduled for release in November.
Lions Gate, which produces the television hit Mad Men and brought the Saw horror franchise to movie theaters, is aiming for the teen audience with the upcoming Hunger Games trilogy. The first of the movies is set to reach theaters in March.
The combined company would be run by Lions Gate Chairman and Chief Executive Officer Jon Feltheimer and Vice Chairman Michael Burns, one of the sources said. Friedman and Wachsberger were expected to take on leadership posts in the new company but their exact roles were still under discussion.
Lions Gate also is the studio behind the film Precious and TV shows Nurse Jackie and Weeds. It was engaged in a years-long battle with activist investor Carl Icahn that ended last August when Icahn dropped his battle for control and sold his shares in the studio.
In addition to the next Twilight, the deal with Summit would bring Lions Gate a stronger presence in international distribution and older titles including Oscar winner The Hurt Locker to its library for home entertainment sales.
News of a possible deal between Lions Gate and Summit was reported earlier by the Hollywood blog Deadline.com.
Lions Gate shares closed Friday at $8.41 on the New York Stock Exchange, giving the company a market capitalization of $1.16 billion, according to Reuters data. The shares have risen more than 27 percent in the past year.