SEC Comment Letter for LIONS GATE ENTERTAINMENT (STRZ) — Nov 1, 2016
LIONS GATE ENTERTAINMENT CORP /CN/ (STRZ, LGF-A, LGF-B) (CIK 0000929351)
Date: Nov. 1, 2016 · CIK: 0000929351 · Accession: 0000000000-16-099266
AI Filing Summary & Sentiment
Letter
Mail Stop 3561 November 1, 2016 James W. Barge Chief Financial Officer Lions Gate Entertainment Corp. 250 Howe Street, 20 th Floor Vancouver, BC V6C 3R8 Canada Lions Gate Entertainment Corp. Amendment No. 3 to Registration Statement on Form S-4 Filed October 28, 2016 File No. 333 -212792
Re: Starz Amendment No. 1 to Schedule 13E -3 Filed October 28, 2016 by Starz, Lions Gate Entertainment Corp., Orion Arm Acquisition Corp., and Dr. John C. Malone File No. 005-86413
Dear Mr. Barge :
We have reviewed the above filings and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter by amending your registration statement and providing the requested information . If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropri ate, please tell us why in your response.
After reviewing any amendment to your registration statement and the information you provide in response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comments are to comments in our October 24, 2016 letter .
James W. Barge Lions Gate Entertainment Corp. November 1, 2016 Page 2
Form S -4
Special Factors, page 45
Background of the Merger, page 45
1. We note your response to our prior comment 7. Please either disclose the identit y of Company A or describe the nature of Company A’s industry and operations so that stockholders understand the alternative transactions considered and the risk s with respect to the receipt of antitrust approval.
Starz’s Purpose and Reasons for the Merger and Other Proposals, pag e 67
2. We note your disclosure on page 72 that Starz’s board of directors did not consider the previous purchase prices paid by Starz during the past two years or the historical market prices of Starz Series A common stock and Starz Series B common stock as they considered those to be indicative of historical rather than current value s. Please expand the discussion to explain why the board chose not to consider the historical values in its determination regarding the fairness of the merger to the unaffiliat ed stockholders of Starz. Similarly, please expand Lions Gate’s and Merger Sub’s discussion on page 106 and Dr. Malone’s discussion on page 109 of why historical information was not considered.
3. We note your disclosure on page 73 that Starz did not consid er any firm offers made by any unaffiliated person , except as described in the joint proxy statement/prospectus . Please clarify as to whether Starz received any firm offers besides those described in the heading “Background of the Merger.”
Opinions of St arz’s Financial Advisors, page 83
Other Presentations by LionTree, page 89
4. We note your response to our prior comment 15. With respect to the discussion of the June 14, 2016 presentation by LionTree, please summarize the Company A discounted cash flow a nalysis on slide 29 and the Luna synergies DCF on slide 34 of exhibit (c)(4). With respect to the discussion of the June 20, 2016 presentation, please summarize the Luna DCF on slide 17 and disclose the Company A DCF equity value per share reference range on slide 32 of exhibit (c)(5).
James W. Barge Lions Gate Entertainment Corp. November 1, 2016 Page 3
Interests of Starz Directors and Executive Officers in the Merger, page 116
Executive Officers, page 117
5. Please disclose that Scott Macdonald will resign as Chief Financial Officer of Starz on May 1, 2017 and discuss the extent to which he will be entitled to severance and other benefits upon a change in control.
We remind you that the filing persons are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or ab sence of action by the staff.
Please contact Sonia Bednarowski at (202) 551 -3666 , Justin Kisner, Office of Mergers and Acquisitions, at (202) 551 -3788, David Orlic, Special Counsel, Office of Mergers and Acquisitions, at (202) 551 -3503, or me at (202) 551 -3217 with any questions.
Sincerely,
/s/ J. Nolan McWilliams
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Mail Stop 3561 November 1, 2016 James W. Barge Chief Financial Officer Lions Gate Entertainment Corp. 250 Howe Street, 20 th Floor Vancouver, BC V6C 3R8 Canada Re: Starz Amendment No. 1 to Schedule 13E -3 Filed October 28, 2016 by Starz, Lions Gate Entertainment Corp., Orion Arm Acquisition Corp., and Dr. John C. Malone File No. 005-86413 Lions Gate Entertainment Corp. Amendment No. 3 to Registration Statement on Form S-4 Filed October 28, 2016 File No. 333 -212792 Dear Mr. Barge : We have reviewed the above filings and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter by amending your registration statement and providing the requested information . If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropri ate, please tell us why in your response. After reviewing any amendment to your registration statement and the information you provide in response to these comments, we may have additional comments. Unless we note otherwise, our references to prior comments are to comments in our October 24, 2016 letter . James W. Barge Lions Gate Entertainment Corp. November 1, 2016 Page 2 Form S -4 Special Factors, page 45 Background of the Merger, page 45 1. We note your response to our prior comment 7. Please either disclose the identit y of Company A or describe the nature of Company A’s industry and operations so that stockholders understand the alternative transactions considered and the risk s with respect to the receipt of antitrust approval. Starz’s Purpose and Reasons for the Merger and Other Proposals, pag e 67 2. We note your disclosure on page 72 that Starz’s board of directors did not consider the previous purchase prices paid by Starz during the past two years or the historical market prices of Starz Series A common stock and Starz Series B common stock as they considered those to be indicative of historical rather than current value s. Please expand the discussion to explain why the board chose not to consider the historical values in its determination regarding the fairness of the merger to the unaffiliat ed stockholders of Starz. Similarly, please expand Lions Gate’s and Merger Sub’s discussion on page 106 and Dr. Malone’s discussion on page 109 of why historical information was not considered. 3. We note your disclosure on page 73 that Starz did not consid er any firm offers made by any unaffiliated person , except as described in the joint proxy statement/prospectus . Please clarify as to whether Starz received any firm offers besides those described in the heading “Background of the Merger.” Opinions of St arz’s Financial Advisors, page 83 Other Presentations by LionTree, page 89 4. We note your response to our prior comment 15. With respect to the discussion of the June 14, 2016 presentation by LionTree, please summarize the Company A discounted cash flow a nalysis on slide 29 and the Luna synergies DCF on slide 34 of exhibit (c)(4). With respect to the discussion of the June 20, 2016 presentation, please summarize the Luna DCF on slide 17 and disclose the Company A DCF equity value per share reference range on slide 32 of exhibit (c)(5). James W. Barge Lions Gate Entertainment Corp. November 1, 2016 Page 3 Interests of Starz Directors and Executive Officers in the Merger, page 116 Executive Officers, page 117 5. Please disclose that Scott Macdonald will resign as Chief Financial Officer of Starz on May 1, 2017 and discuss the extent to which he will be entitled to severance and other benefits upon a change in control. We remind you that the filing persons are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action or ab sence of action by the staff. Please contact Sonia Bednarowski at (202) 551 -3666 , Justin Kisner, Office of Mergers and Acquisitions, at (202) 551 -3788, David Orlic, Special Counsel, Office of Mergers and Acquisitions, at (202) 551 -3503, or me at (202) 551 -3217 with any questions. Sincerely, /s/ J. Nolan McWilliams J. Nolan McWilliams Attorney -Advisor Office of Transportation and Leisure cc: David E. Shapiro, Esq. Wachtell, Lipton, Rosen & Katz