MHR Fund Management LLC files Early Warning Report for Starz Entertainment Corp. (formerly Lions Gate Entertainment Corp.)

Cision Canada

2 days ago

NEW YORK, June 4, 2025 /CNW/ - On June 4, 2025, MHR Fund Management LLC (" Fund Management") filed an early warning report in accordance with Section 5.2(2)(a)(i) of National Instrument 62-104 – Take-Over Bids and Issuer Bids (the " Early Warning Report") for Starz Entertainment Corp. (formerly Lions Gate Entertainment Corp.). The report was filed in conjunction with Fund Management's Schedule 13D filing with the U.S. Securities and Exchange Commission as of the date hereof, a copy of which is available on EDGAR at www.sec.gov.
Item 1 Security and Reporting Issuer
1.1 State the designation of securities to which this report relates and the name and address of the head office of the issuer of the securities.
This report relates to common shares (the " Common Shares") of Starz Entertainment Corp. (the " Issuer"). The Issuer's head office is located at:
Starz Entertainment Corp. (formerly Lions Gate Entertainment Corp.)
250 Howe Street, 20th Floor
Vancouver, B.C. V6C 3R8, Canada
1.2 State the name of the market in which the transaction or other occurrence that triggered the requirement to file this report took place.
Not applicable.
Item 2 Identity of the Acquiror
2.1 State the name and address of the acquiror.
MHR Fund Management LLC (the " Acquiror")
40 West 57 th Street, Floor 24
New York, NY, 10019
The Acquiror is a Delaware limited liability company.
2.2 State the date of the transaction or other occurrence that triggered the requirement to file this report and briefly describe the transaction or other occurrence.
The Acquiror acquired ownership of 353,334 Common Shares on June 2, 2025 (the " Share Purchase").
As of the date of the last report, the Acquiror beneficially held, through the MHR Funds (as defined herein), 2,509,898 Common Shares of the Issuer, representing approximately 15.0% of the issued and outstanding Common Shares. Dr. Rachesky, through MHRC, MHRC II, Institutional Advisors III, Institutional Advisors IV and MHR Holdings (all as defined herein), beneficially held 2,524,509 Common Shares, representing approximately 15.1% of the issued and outstanding Common Shares.
Following the Share Purchase, the Acquiror beneficially held, through the MHR Funds, 2,863,232 Common Shares of the Issuer, representing approximately 17.1% of the issued and outstanding Common Shares. Dr. Rachesky, through MHRC, MHRC II, Institutional Advisors III, Institutional Advisors IV and MHR Holdings, beneficially held 2,877,843 Common Shares of the Issuer, representing approximately 17.2% of the issued and outstanding Common Shares.
In addition, Dr. Rachesky owns 1,476 restricted share units, payable upon vesting in an equal number of Common Shares.
The Share Purchase triggered the requirement to file this report in accordance with Section 5.2(2)(a)(i) of National Instrument 62-104 Take-Over Bids and Issuer Bids, as it resulted in a change to the Acquiror's holdings that exceeded 2% of the number of Common Shares issued and outstanding.
Item 3 Interest in Securities of the Reporting Issuer
3.1 State the designation and number or principal amount of securities acquired or disposed of that triggered the requirement to file the report and the change in the acquiror's securityholding percentage in the class of securities.
See Item 2.2.
3.2 State whether the acquiror acquired or disposed ownership of, or acquired or ceased to have control over, the securities that triggered the requirement to file the report.
Following the Share Purchase, the Acquiror acquired ownership and/or control, directly or indirectly, the securities that triggered the requirement to file the report.
3.3 State the designation and number or principal amount of securities and the acquiror's securityholding percentage in the class of securities, immediately before and after the transaction or other occurrence that triggered the requirement to file this report.
See Item 2.2.
Item 4 Consideration Paid
4.1 State the value, in Canadian dollars, of any consideration paid or received per security and in total.
The Acquiror acquired the Common Shares at a price of approximately C$19.40 per Common Share, being the Canadian dollar equivalent of US$14.15 based on the Bank of Canada's daily exchange rate on June 2, 2025 of 1.3707 (the " Exchange Rate"), for aggregate consideration of CAD$6,853,500, being the Canadian dollar equivalent of US$5,000,000 based on the Exchange Rate.
Item 5 Purpose of the Transaction
State the purpose or purposes of the acquiror and any joint actors for the acquisition or disposition of securities of the reporting issuer. Describe any plans or future intentions which the acquiror and any joint actors may have which relate to or would result in any of the following:
(a) the acquisition of additional securities of the reporting issuer, or the disposition of securities of the reporting issuer;
(b) a corporate transaction, such as a merger, reorganization or liquidation, involving the reporting issuer or any of its subsidiaries;
(c) a sale or transfer of a material amount of the assets of the reporting issuer or any of its subsidiaries;
(d) a change in the board of directors or management of the reporting issuer, including any plans or intentions to change the number or term of directors or to fill any existing vacancy on the board;
(e) a material change in the present capitalization or dividend policy of the reporting issuer;
(f) a material change in the reporting issuer's business or corporate structure;
(g) a change in the reporting issuer's charter, bylaws or similar instruments or another action which might impede the acquisition of control of the reporting issuer by any person or company;
(h) a class of securities of the reporting issuer being delisted from, or ceasing to be authorized to be quoted on, a marketplace;
(i) the issuer ceasing to be a reporting issuer in any jurisdiction of Canada;
(j) a solicitation of proxies from securityholders;
(k) an action similar to any of those enumerated above.
The Common Shares reflected in this report were acquired for investment purposes. The Reporting Persons intend to review their holdings in the Issuer on a continuing basis and as part of this ongoing review, evaluate various alternatives that are or may become available with respect to the Issuer and its securities. The Reporting Persons may from time to time and at any time (in accordance with any trading policy of the Issuer or its subsidiaries and affiliates that may then be applicable to the Reporting Persons), in their sole discretion, acquire or cause to be acquired, additional equity or debt securities or other instruments of the Issuer, its subsidiaries or affiliates, or dispose, or cause to be disposed, such equity or debt securities or instruments, in any amount that the Reporting Persons may determine in their sole discretion, through public or private transactions or otherwise.
In addition to the foregoing, certain of the Reporting Persons are pursuing various alternatives with respect to the Issuer's securities in order to create liquidity opportunities for limited partners of certain of the Reporting Persons. Among the alternatives being pursued, such Reporting Persons are considering forming a continuation vehicle or other special purpose vehicle that would continue to be controlled by certain of the Reporting Persons that would enable existing limited partners to achieve liquidity or continue their indirect investment in the Issuer, making an in-kind distribution to certain limited partners of certain of such Reporting Persons, or effecting a public or private transaction. The timing, and whether and how these alternatives can be effected, will depend on transaction and market terms and conditions, as well as legal, regulatory and other factors.
The Reporting Persons reserve the right to and may, from time to time and at any time, in their sole discretion, formulate and implement other purposes, plans or proposals regarding the Issuer or any of its subsidiaries or affiliates or any of their equity or debt securities as the Reporting Persons may deem advisable in their sole discretion. The information set forth in this Item 5 is subject to change from time to time and at any time, and there can be no assurances that any of the Reporting Persons will or will not take, or cause to be taken, any of the actions described above or any similar actions.
Item 8 Exemption
If the acquiror relies on an exemption from requirements in securities legislation applicable to formal bids for the transaction, state the exemption being relied on and describe the facts supporting that reliance.
Not applicable.
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 Starz's issuer profile on the System for Electronic Document Analysis and Retrieval + at www.sedarplus.ca or please contact Charles Zehren at [phone] or [email protected].