NEW YORK, Oct. 03, 2019 (GLOBE NEWSWIRE) -- On October 2, 2019, investment funds (the “MHR Funds”) affiliated with MHR Fund Management LLC (“Fund Management”) agreed to acquire (the “Acquisition”) 2,399,571 Class A voting shares, no par value (“Class A Voting Shares”) of Lions Gate Entertainment Corp. (“Lions Gate”), representing an aggregate of approximately 2.90% of the 82,654,510 issued and outstanding Class A Voting Shares as of October 2, 2019 (calculated on an undiluted basis) pursuant to an agreement with certain entities affiliated with John C. Malone at a price of C$12.22¹ (US$9.19) per Class A Voting Share or C$29,316,004.60¹ (US$22,052,057) in the aggregate. This news release does not constitute an offer to sell or the solicitation of an offer to buy Class A Voting Shares.

The acquiring MHR Funds are MHR Capital Partners Master Account III LP (“Master Account III”) and MHR Institutional Partners IV LP (“Institutional Partners IV”). Fund Management is an affiliate of and has an investment management agreement with each of Master Account III and Institutional Partners IV. MHR Holdings LLC (“MHR Holdings”) is the managing member of Fund Management. MHR Advisors III LLC (“Advisors III”) is the general partner of Master Account III. MHR Institutional Advisors IV LLC (“Institutional Advisors IV”) is the general partner of Institutional Partners IV. MHR Institutional Advisors IV (MI) LLC (“Institutional Advisors IV (MI)”) is the managing member of Institutional Advisors IV.  Mark H. Rachesky, M.D. is the managing member of MHR Holdings, Advisors III and Institutional Advisors IV (MI). Dr. Rachesky, Fund Management, MHR Holdings, Advisors III, Institutional Advisors IV and Institutional Advisors IV (MI) are collectively referred to herein as the “Reporting Persons”.

Additionally, other investment funds affiliated with Fund Management acquired 779,900 Class A Voting Shares for an aggregate price of C$15,059,596.80² (US$11,100,985.36) through the following open market purchases on the New York Stock Exchange:

• on December 19, 2018, 371,600 Class A Voting Shares at a price of C$19.4622³ (US$14.47) per Class A Voting Share;
   
• on December 20, 2018, 258,300 Class A Voting Shares at a weighted average price of C$18.8831⁴ (US$13.9927); and     
  
  
• on December 21, 2018, 150,000 Class A Voting Shares at a weighted average price of C$19.0794⁵ (US$14.0641).

Prior to the transactions on December 19, 2018 through December 21, 2018 and October 2, 2019, Fund Management beneficially owned, through various affiliated investment funds, 15,105,522 Class A Voting Shares and 15,105,522 Class B Non-Voting Shares. In addition, Dr. Rachesky owned: (i) 37,408 Class A Voting Shares directly; (ii) 37,741 Class B Non-Voting Shares directly; (iii) 407 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which vested on September 13, 2019; (iv) 407 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which vested on September 13, 2019; (v) 550 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which vest in two equal annual installments and vesting began on September 12, 2019; (vi) 574 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which vest in two equal annual installments and vesting began on September 12, 2019, (vii) 1,115 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which vest in three equal annual installments and vesting began on September 11, 2019 and (viii) 1,174 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which vest in three equal annual installments and vesting began on September 11, 2019. Collectively, prior to the transactions described, various investment funds affiliated with Fund Management and Dr. Rachesky owned approximately 18.4% of the Class A Voting Shares outstanding and approximately 11.4% of the Class B Non-Voting Shares outstanding, each calculated on an undiluted basis

As a result of the transactions described, Fund Management and its joint actors (collectively, “MHR”) may be deemed to be the beneficial owners of 18,331,304 Class A Voting Shares representing approximately 22.2% of the Class A Voting Shares and 15,152,628 Class B Non-Voting Shares representing approximately 11.2% Class B Non-Voting Shares outstanding, each calculated on an undiluted basis. Of this amount, Dr. Rachesky owns 43,026 Class A Voting Shares and 43,612 Class B Non-Voting Shares directly. Dr. Rachesky also owns (i) 275 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which are scheduled to vest on September 12, 2020; (ii) 287 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which are scheduled to vest on September 12, 2020; (iii) 743 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which are scheduled to vest in two equal annual installments beginning on September 11, 2020; (iv) 782 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which are scheduled to vest in two equal annual installments beginning on September 11, 2020; (v) 2,267 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which are scheduled to vest in three equal annual installments beginning on September 10, 2020; and (vi) 2,425 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which are scheduled to vest in three equal annual installments beginning on September 10, 2020.

The Acquisition is not subject to the requirements of Canadian securities laws respecting formal offers as no offer was made to any persons in any jurisdiction of Canada or, to the MHR Fund’s knowledge, to any person shown on the books of Lions Gate as having an address in any province or territory of Canada. 

The Class A Voting Shares were acquired for investment purposes based on the view that the Class A Voting Shares represented an attractive investment opportunity. MHR reviews its holdings in Lions Gate on a continuing basis and as part of this ongoing review, evaluates various alternatives that are or may become available with respect to Lions Gate and its securities. MHR may from time to time and at any time, in its sole discretion, acquire or cause to be acquired, additional equity or debt securities or other instruments of Lions Gate, its subsidiaries or affiliates, or dispose or cause to be disposed, such equity or debt securities or instruments, in any amount that MHR may determine in its sole discretion, through open market transactions, privately negotiated transactions or otherwise.

The head office address of Lions Gate is located at:

20^th Floor 250 Howe Street     
Vancouver, B.C.         
V6C 3R8

The head office address of MHR is located at:  

c/o MHR Fund Management LLC
1345 Avenue of the Americas, 42nd Floor
New York, New York 10105, USA

For further information and to obtain a copy of the early warning report filed by MHR under applicable Canadian securities laws in connection with the acquisitions, please see Lions Gate’s issuer profile on the System for Electronic Document Analysis and Retrieval at www.sedar.com or please contact Charles Zehren at Rubenstein (Telephone:  212-843-8590).

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¹ Calculated using an US$:C$ exchange rate of 1.3294, being the daily US$:C$ exchange rate published by the Bank of Canada for October 2, 2019.
² Calculated using an US$:C$ exchange rate of 1.3566, being the daily US$:C$ exchange rate published by the Bank of Canada for December 21, 2018.
³ Calculated using an US$:C$ exchange rate of 1.3450, being the daily US$:C$ exchange rate published by the Bank of Canada for December 19, 2018.
⁴ Calculated using an US$:C$ exchange rate of 1.3495, being the daily US$:C$ exchange rate published by the Bank of Canada for December 20, 2018.
⁵ Calculated using an US$:C$ exchange rate of 1.3566, being the daily US$:C$ exchange rate published by the Bank of Canada for December 21, 2018.

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