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Lionsgate, Starz Swap Stock Shares

11 Feb, 2015 By: Erik Gruenwedel

John Malone

Cable executive John Malone, who is trading a portion of his Starz shares for stake in Lionsgate, joins the mini-major’s board

John Malone, a cable pioneer whose Liberty Media Corp. spun off Starz LLC in 2013, has entered into a stock exchange agreement with Lionsgate.

Under the deal, Malone will receive 3.43% of Lionsgate newly authorized common stock in exchange for 4.51% of Starz common stock held by Malone — or 14.5% of the pay-TV content aggregator’s outstanding stock. Malone, who remains Starz's largest voting shareholder with approximately 32.1% of the total voting power of Starz, will join Lionsgate's board of directors.

"John has been a pioneer in content distribution to the next generation consumer, and we're delighted to add an investor of his caliber, experience and vision to our board," Lionsgate CEO Jon Feltheimer and vice chairman Michael Burns said in a joint statement. "We see tremendous value in Starz as well as the potential to explore a broad range of strategic initiatives in the future."

Chris Albrecht, CEO of Starz, said Lionsgate has been a great partner with Starz on past projects.

Indeed, in 2012, Lionsgate licensed 500 catalog movies to Starz's pay-TV multichannel video distribution outlets, including Starz, Encore and Movieplex.

“We have tremendous respect for the business they have built and their leadership position in the entertainment industry,” Albrecht said in a statement. “We're pleased that they will be joining Malone as shareholders who support our vision."

About the Author: Erik Gruenwedel

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