Artisan, Lions Gate in Takeover Tussle for Operational Control26 Jun, 2001 By: Hive News
The sale of film distributor Artisan Entertainment has apparently turned into a takeover duel between Artisanand Lions Gate, according to a wire service report carried by Reuters, with each bidding to take over the other's company.
According to the report, Lions Gate recently formalized an offer of more than $50 million plus some debt assumption to buy Artisan, but the offer was said to fall short of the $100 million auction price in cash or stock plus more than $200 million in debt assumption. Merrill Lynch has been conducting the auction of Artisan, with Allen & Co. consulting.
Late last week Artisan responded with a counteroffer to buy Canadian rival Lions Gate.
The wire service report speculated that Artisan offered a straight equity swap for publicly traded Lions Gate, with an addedoffer to convert $50 million of the bid to cash to suit Lions Gate shareholders.
Sources indicated that it's unlikely Lions Gate's board will seriously consider the Artisan bid. A straight equity swap is believed unacceptable to Lions Gate as well, because it devalues Lions Gate in the face of upbeat financial results due Thursday.
Top management at both companies seem to agree that a combined Artisan-Lions Gate makes sense -- it's now a matter of striking the right deal that settles who will have chief operational control of the combo company after the merger.
Vancouver-based Lions Gate has an office in Los Angeles. Artisan is controlled by Boston-based investment firm Audex.