NEW YORK, April 9, 2015 /CNW/ - On April 8, 2015, investment funds (the "MHR Funds") affiliated with MHR Fund Management LLC ("Fund Management") entered into an underwriting agreement with Lions Gate Entertainment Corp. ("Lions Gate") and J.P. Morgan Securities LLC, as underwriter, pursuant to which the underwriter agreed to purchase 10,000,000 common shares of Lions Gate (the "Common Shares") from the MHR Funds, representing approximately 6.9% of the issued and outstanding Common Shares of Lions Gate, for sale to the public through an effective registration statement filed by Lions Gate (the "Offering"). The MHR Funds have also granted the underwriter an option to purchase up to an additional 1,500,000 Common Shares for a period of 30 days (the "Additional Shares Option").
The Offering is being made on a private placement basis to accredited investors (as such term is defined under applicable Canadian securities laws) in Ontario, Québec, Manitoba, Alberta, New Brunswick and Prince Edward Island. This press release does not constitute an offer to sell or the solicitation of an offer to buy Common Shares.
The selling MHR Funds are MHR Capital Partners Master Account LP, MHR Capital Partners (100) LP, MHR Institutional Partners II LP, MHR Institutional Partners IIA LP and MHR Institutional Partners III LP. Fund Management is an affiliate of and has an investment management agreement with each of the MHR Funds. MHR Holdings LLC ("MHR Holdings") is the managing member of Fund Management. MHR Advisors LLC ("Advisors") is the general partner of each of MHR Capital Partners Master Account LP and MHR Capital Partners (100) LP; MHR Institutional Advisors II LLC ("Institutional Advisors II") is the general partner of each of MHR Institutional Partners II LP and MHR Institutional Partners IIA LP; and MHR Institutional Advisors III LLC ("Institutional Advisors III") is the general partner of Institutional Partners III LP. MHRC LLC ("MHRC") is the managing member of Advisors. MHRC II LLC ("MHRC II") is the managing member of Institutional Advisors II. Mark H. Rachesky, M.D. is the managing member of MHR Holdings, MHRC, MHRC II and Institutional Advisors III. Dr. Rachesky, the MHR Funds, Fund Management, MHR Holdings, Advisors, Institutional Advisors II, Institutional Advisors III, MHRC and MHRC II are collectively referred to herein as the "Reporting Persons".
Pursuant to the underwriting agreement, the MHR Funds have agreed to sell 10,000,000 Common Shares to the underwriter at a price of US$31.60 per Common Share (approximately C$39.53 per Common Share). The offering price to the public in the Offering will be US$32.00 per Common Share (approximately C$40.03 per Common Share). Any Common Shares purchased by the underwriter pursuant to the Additional Shares Option would be sold at the same price.
Immediately following the closing of the Offering, Fund Management will beneficially own, through the MHR Funds, 41,261,899 Common Shares, representing approximately 28.3% of the issued and outstanding Common Shares of Lions Gate. If the Additional Shares Option is exercised in full by the underwriter, Fund Management will beneficially own, through the MHR Funds, 39,761,899 Common Shares, representing approximately 27.3% of the issued and outstanding Common Shares of Lions Gate. In addition, Dr. Rachesky will own (i) 52,648 Common Shares directly and (ii) 3,486 restricted share units, payable upon vesting in an equal number of Common Shares, 1,076 of which are scheduled to vest on September 11, 2015, 445 of which are scheduled to vest on September 10, 2015, 445 of which are scheduled to vest on September 10, 2016 and 1,520 of which are scheduled to vest in three equal annual installments beginning on September 9, 2015.
The address of Fund Management and the MHR Funds is:
c/o MHR Fund Management LLC
40 West 57th Street, 24th Floor
New York, New York 10019
SOURCE MHR Fund Management LLC
For further information: For additional information or for a copy of Fund Management's early warning report, please contact: Aaron Palash, Joele Frank, Wilkinson Brimmer Katcher, 212-355-4449