Lionsgate/Starz
Lionsgate said it has paid $92.5 million to settle a class-action lawsuit filed by shareholders who were unhappy about the companys $4.4 billion acquisition of Starz.
The news came via a brief SEC filing, which noted that Lionsgate plans to have insurance cover the hit.
Between mid-July and late-August of 2016, seven class-action suits were filed against the company as well as former board members including John Malone. The actions were later consolidated by the Delaware Chancery Court.
One of the complaints pointed to the close ties between the parties, which allegedly tainted the transaction and enriched Malone at shareholders expense. “With the proposed transaction, the family patriarch — Malone — has forced a marriage between these kissing cousins that gives him value for his interest in Starz at the expense of the Starz minority stockholders,” the complaint said.
The transaction involved two different classes of Starz stock. Series A shares of Starz were converted into $18 per share in cash and 0.6784 of a share of Lionsgate non-voting shares. Series B shares of Starz, a majority of which were owned by Malone, turned into $7.26 a share in cash, 0.6321 shares of non-voting stock and 0.6321 shares of voting stock.
Shares in Lionsgate today have not been dinged by the settlement news. They are up 1% to $23.11 in mid-day trading.
[contf]
[contfnew]
Deadline
[contfnewc]
[contfnewc]
