Legendary Entertainment Considers Takeover of Lionsgate Studios
Legendary Entertainment LLC, the independent film and TV studio known for producing the Dune trilogy and A Minecraft Movie, is reportedly considering a takeover of Lionsgate Studios Corp. According to individuals familiar with the matter, the discussions began after Lionsgate completed its separation from Starz Entertainment Corp., the TV network and streaming service, in May. These conversations initially focused on forming a potential partnership to co-produce a few films, allowing both companies to assess how they might collaborate before deciding on a full acquisition.
The talks are still in their early stages, and neither Legendary nor Lionsgate has officially commented on the possibility of a takeover. However, the news alone was enough to send Lionsgate’s stock price soaring. Shares jumped 8.6% following the report and ended the day up by 20%. This surge highlights the market’s interest in the potential merger between two major players in the entertainment industry.
Lionsgate, which currently holds a market value of $1.8 billion, owns the rights to several well-known film franchises such as John Wick, The Hunger Games, and Twilight. The company also boasts a successful television division, having produced hits like AMC’s Mad Men. For Legendary, acquiring Lionsgate would provide access to a strong theatrical distribution network, which could significantly enhance its ability to bring films to audiences.
One of Legendary’s recent projects, A Minecraft Movie, co-produced with Lionsgate and released by Warner Bros. Discovery Inc.’s film studio, has been a massive success. It became the highest-grossing movie at the domestic box office this year, with over $423.9 million in ticket sales in the U.S. and Canada. This performance underscores the potential value that a partnership with Lionsgate could bring to Legendary.
Analysts have noted that a possible takeover of Lionsgate makes sense for Legendary, especially given that Lionsgate operates as a “pure-play studio.” According to Geetha Ranganathan, an analyst at Intelligence, Lionsgate’s extensive content library contributes significantly to its revenue, generating high profit margins. She suggested that Legendary’s interest in Lionsgate could prompt other companies to consider similar bids.
Josh Grode, CEO of Legendary, emphasized the importance of Apollo Global Management’s support during a 2024 interview with Businessweek. He stated that Apollo understands both the business and media sectors and has the financial resources to invest in new opportunities. This relationship between Legendary and Apollo has previously led to speculation about potential acquisitions, including Paramount Pictures and its parent company, Paramount Global. However, those plans were ultimately abandoned when David Ellison’s Skydance Media LLC acquired the business instead.
As the entertainment landscape continues to evolve, the possibility of a Legendary-Lionsgate merger could reshape the industry. With both companies bringing unique strengths to the table, the outcome of these discussions will be closely watched by investors, fans, and industry insiders alike. Whether or not a full takeover occurs, the collaboration between the two studios could lead to exciting new projects and opportunities in the years to come.
