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.
Both deals would bolster the new Summit's ability to operate as a minimajor. Lionsgate and Miramax possess significant libraries and the merged entity would have more firepower in a marketplace where the major have scaled back the production of mid-budget films in favor of tentpole and franchise properties -- creating an opportunity for sizable indies to fill that gap.
Summit has shown that it can exploit a franchise in "Twilight" while Lionsgate's in the midst of starting its own tentpole property with the four-picture "The Hunger Games" franchise. The first "Games" opens March 23 and the trailer has been attached to "Breaking Dawn -- Part 1."
Lionsgate is coming off a year that's seen its stock appreciate by 28%, closing the year at $8.32. Shares had been held down in recent years due to mixed performance by its feature films plus a barrage of criticsim from billionaire Carl Icahn, who agreed in late August to sell off his stake.
Lionsgate, which has an extensive TV production/distribution operation, has a notable track record on the acquisition front under Jon Feltheimer, co-chairman and CEO, and vice chairman Michael Burns -- Trimark in 2000, Artisan in 2003, Redbus in 2005, Debmar-Mercury in 2006, Mandate in 2007 and TV Guide in 2009 along with a stake in Roadside Attractions in 2007. Despite the ongoing battle with Icahn, Lionsgate remained an active bidder for MGM in 2009 and 2010 before the Lion went through its pre-packaged bankruptcy in late 2010.
As for Colony Capital, the private investment firm headed by Tom Barrack shored up its financing last month via a securitization of the Miramax assets in a bond offering worth $500 million. The securitization deal used an independent evaluation by Duff and Phelps that pegged Miramax's total worth at more than $813 million as of last July 1.
Miramax, headed by CEO Mike Lang, signed more than $300 million in new licensing agreements last year, much of which came from Netflix and Hulu. Miramax is developing about 20 feature projects with outside partners but has no plans to start funding production and has focused on exploiting its 700-title library.
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