Lionsgate draws takeover interest from Bolloré, Banijay

CALIFORNIA: Lionsgate Studios is back in play. Shares in the studio behind “John Wick” and “The Hunger Games” leapt as much as 9% in after-hours trading on Tuesday after Reuters reported that the company, worth some $3.8bn, is fielding takeover interest from France’s Bolloré Group and television powerhouse Banijay. An investment bank has been drafted in to sift through the approaches, though insiders caution that nothing is signed, sealed or certain.

Bolloré, which already controls pay-TV operator Canal+, wants beef for its production arm and sees Lionsgate’s 20,000-title library as just the ticket. Banijay, the outfit behind “Big Brother” and “Survivor”, has also sniffed around, but is busy digesting its recent merger with All3Media and may not move fast. Both declined to comment; Bolloré did not respond.

The interest is the latest sign that European media firms are scrambling for scale and intellectual property to take on the American streaming giants. Lionsgate’s crown jewels include the Twilight saga and this year’s Michael Jackson biopic “Michael”, which has hoovered up more than $1bn at the box office worldwide.

Timing is telling. Mark Rachesky, a Lionsgate director and shareholder, has just shifted his roughly 10% stake into a new investment vehicle backed by RenWave Kore, an outfit founded by Cody Kittle, once of activist investor Elliott Investment Management, and bankrolled by Sequoia Heritage. Read into that what you will.

Money, though, could scupper any romance. Investors are paying 26 times expected pretax profit for Lionsgate shares, a fat premium to peers, and sources say past suitors have walked away over price alone. Netflix, too, was reported by Semafor in June to have eyed the studio, though it made no formal approach and has denied interest.

Retail traders are already dreaming big. Chatter on Stocktwits has flipped from bearish to neutral, with one punter angling for a buyout north of $20 a share — well above Tuesday’s close of $13.29. Lionsgate stock is already up 46% this year. Whether Bolloré, Banijay or anyone else actually pulls the trigger remains, for now, anyone’s guess.