Lionsgate moves forward with plan to split

US studio Lionsgate is moving forwards with its plan to split the production and pay TV and streaming arms of the business.

Lionsgate has now filed a Form 10 registration statement with the US Securities and Exchange Commission that outlines its plan to separate into a studio business (Lionsgate) created from a spin-off with a new public listing, and a pay TV and streaming business (Starz), which would remain in the existing company.

“The filing of this Form 10 continues the process of planning for the separation of the Studio and Starz businesses,” said Lionsgate CEO Jon Feltheimer.

“We remain excited by the prospect of separating Lionsgate and Starz into standalone companies with strong financial foundations that will allow each company to pursue its own distinct strategy while offering investors the opportunity to own both a pure-play publicly-traded content studio and a premium subscription platform.”

Both entities will compirse domestic arms registered in the US state of Delaware and international businesses.

Lionsgate argues in the form that “the separation will allow New Starz and New Lionsgate to more effectively pursue their own distinct operating priorities and strategies, and it will enable the management teams of each of the two companies to focus on strengthening their core businesses, and pursue distinct and targeted opportunities to accelerate revenue and profitability”.

It said that the separate would enable each part to “more effectively articulate its own clear investment thesis for its business as a pure-play content studio and platform, respectively, operating in a world of vertically integrated conglomerates, in order to attract a long-term investor base suited to its business”, with each business having direct access to the capital markets.

Completion of the separate remains subject to approval by the studio’s board and shareholders as well as regulators and will be dependent on favourable market conditions.

While Starz is likely to emerge as a streaming-oriented business – it operates the Lionsgate+ streaming service, formerly Starzplay – in a market that is expected to see consolidation, the studio could be an attractive acquisition candidate for larger players looking to acquire content assets.