Lionsgate Studio raises PIPE amount to US$225 million ahead of closing SPAC deal

LIONSGATE Studio raised its private investment in public equity (PIPE) amount to US$225 million ahead of its merger with Screaming Eagle Acquisition, the special purpose-acquisition company (SPAC) firm disclosed in a regulatory filing on Friday (Apr 12).

The blank-cheque deal was initially expected to raise US$175 million in PIPE financing for Lionsgate from mutual funds and other investors.

Through PIPE deals, SPACs raise additional funds from private investors, including hedge funds and institutions, in exchange for shares before the deal is completed.

While an upsize in a PIPE deal can signal strong investor confidence and improved liquidity, it may also result in dilution for existing shareholders.

Lionsgate had last year agreed to spinoff its studio in a deal valued at about US$4.6 billion, including debt, to create a new public firm for its film and television assets, which include about 18,000 titles.

The amount of proceeds expected to be delivered to Lionsgate has also been upsized to between US$350 million and US$409.5 million, from US$350 million previously, the filing showed. REUTERS