Summit Entertainment Might Accept Lionsgate Merger Deal As Early As This Week

Merger talks between Lionsgate and Summit Entertainment has been going as far back as during fall of 2008 before ‘Twilight’ was released. However, according to Variety, while previous merger talks fell through, this time Summit Entertainment might accept the buyout offers from either Lionsgate or Colony Capital as early as this week.

Privately held Summit, facing the end of the “Twilight” franchise this year, could decide as early as this week whether to accept competing buyout offers from Lionsgate and Miramax owner Colony Capital. Though the talks have been going on for several weeks, spokespeople for the three companies have not confirmed any of the negotiations and have had no comment.

People familiar with the situation have indicated the bids for Summit are in $350 million to $400 million range and noted that a deal could take many more weeks to close. As a public company, Lionsgate would be required to clear several hurdles to complete such a transaction — which isn’t expected to include issuing significant amounts of stock or debt.

Summit’s coming into 2012 with its fourth “Twilight” pic having racked up a stellar $273 million domestically and another $362 million internationally. “The Twilight Saga: Breaking Dawn — Part 2,” due to open Nov. 16, is likely to perform in the same range.

Over the past five years, Summit co-chairs Rob Friedman and Patrick Wachsberger have transformed Summit from a foreign sales company into a full-service production and distribution studio. Their timing has been fortunate with Summit announcing a $1 billion financing deal in April 2007 — a transaction that would not have been possible a few months later as the financial markets began melting down.

In March, Summit Entertainment closed a $750 million financing deal — a $550 million term loan and a $200 million revolving line of credit — that allowed the company to unshackle itself from itself from some of its debt, increase feature production and run day-to-day operations. It also paid a cash distribution to its largest investors, including Participant Media and private equity fund Rizvi Traverse Management.

If either the Lionsgate or Colony deals go through, Friedman and Wachsberger are expected to remain in some kind of top-level exec capacities in the merged entity. Summit and Lionsgate have had discussions about uniting going back as far as the fall of 2008, just before the bow of the first “Twilight” pic. Colony, which completed a $663 million buyout of Miramax from Disney in December 2010, emerged as a possible Summit bidder in November.

Head over to Variety to read the full article.

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Source: Variety via Down With The Capitol.

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Posted on January 2, 2012, in The Hunger Games Movie and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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