NEW YORK, May 9, 2025 /CNW/ – On May 9, 2025, MHR Fund Management LLC (“Fund Management”) filed an early warning report (the “Early Warning Report”) for Lionsgate Studios Corp. (“Lionsgate”). The report was filed in conjunction with Fund Management’s Schedule 13D filing with the U.S. Securities and Exchange Commission as of the date hereof, a copy of which is available on EDGAR at www.sec.gov. 

Item 1   Security and Reporting Issuer

1.1  State the designation of securities to which this report relates and the name and address of the head office of the issuer of the securities.

This report relates to common shares without par value (“Common Shares”) of Lionsgate Studios Corp. (the “Issuer”), a British Columbia, Canada corporation. The Issuer’s head office is located at:

Lionsgate Studios Corp.
250 Howe Street, 20th Floor
Vancouver, B.C. V6C 3R8, Canada

1.2  State the name of the market in which the transaction or other occurrence that triggered the requirement to file this report took place.

Not applicable

Item 2   Identity of the Acquiror

2.1  State the name and address of the acquiror.

MHR Fund Management LLC (the “Acquiror”)
40 West 57th Street, Floor 24
New York, NY, 10019

The Acquiror is a Delaware limited liability company.

2.2  State the date of the transaction or other occurrence that triggered the requirement to file this report and briefly describe the transaction or other occurrence.

On May 6, 2025, the Acquiror received Common Shares reported in this report as a result of the completion of the separation transactions contemplated by that certain Arrangement Agreement, dated as of January 29, 2025 (as it may be amended from time to time, the “Arrangement Agreement”), by and among Lions Gate Entertainment Corp., a British Columbia corporation (“Lionsgate” or “LGEC”), Lionsgate Studios Holding Corp., a newly incorporated entity formed under the laws of the Province of British Columbia and a wholly-owned subsidiary of Lionsgate (which will change its name to Lionsgate Studios Corp.), and LG Sirius Holdings ULC, a British Columbia unlimited liability corporation and wholly-owned subsidiary of Lionsgate that previously owned approximately 87.8% of the issued and outstanding shares of the Issuer.

The Arrangement Agreement provided for the implementation of a plan of arrangement that resulted in the separation of the motion picture and television studio operations (the “LG Studios Business”) from the other businesses of Lionsgate, including the STARZ-branded premium subscription platforms (the “Starz Business”), through a series of transactions (the “Separation Transactions”) that resulted in the pre-transaction shareholders of Lionsgate owning shares in two separately traded public companies: (1) LGEC, renamed “Starz Entertainment Corp.”, which holds, directly and through subsidiaries, the Starz Business, and (2) the Issuer, which holds, directly and through subsidiaries, the LG Studios Business.

In connection with the completion of the Separation Transactions, among other things, each outstanding Class A voting common share of Lionsgate held by the Reporting Persons (as defined below) and their respective affiliates pre-completion was converted, through a series of steps, into one and twelve one-hundredths (1.12) Common Shares of the Issuer and each outstanding Class B common share of Lionsgate held by the Reporting Persons and their respective affiliates pre-completion was converted, through a series of steps, into one Common Share of the Issuer.

This report is being filed in conjunction with the Acquiror’s Schedule 13D filing with the U.S. Securities and Exchange Commission as of the date hereof (the “Schedule 13D”), a copy of which is available on EDGAR at www.sec.gov. 

2.3  State the names of any joint actors.

The Acquiror is an affiliate of and has an investment management agreement with MHR Capital Partners Master Account LP, MHR Capital Partners (100) LP, MHR Institutional Partners II LP, MHR Institutional Partners IIA LP, MHR Institutional Partners III LP and MHR Institutional Partners IV LP (collectively, the “MHR Funds”). MHR Holdings LLC (“MHR Holdings”) is the managing member of the Acquiror. 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. MHR Institutional Advisors III LLC (“Institutional Advisors III”) is the general partner of Institutional Partners III LP. MHR Institutional Advisors IV LLC (“Institutional Advisors IV”) is the general partner of Institutional Partners IV LP. MHRC LLC (“MHRC”) is the managing member of the Advisors. MHRC II LLC (“MHRC II”) is the managing member of Institutional Advisors II. Mark H. Rachesky, M.D. (“Dr. Rachesky”) is the managing member of MHR Holdings, MHRC, MHRC II, Institutional Advisors III and Institutional Advisors IV. As a result, each of Dr. Rachesky, the Acquiror, MHR Holdings, the MHR Funds, Advisors, Institutional Advisors II, Institutional Advisors III, Institutional Advisors IV, MHRC and MHRC II (collectively, the “Reporting Persons”) may be considered to be joint actors in connection with the disclosure set out herein.

Item 3   Interest in Securities of the Reporting Issuer

3.1  State the designation and number or principal amount of securities acquired or disposed of that triggered the requirement to file the report and the change in the acquiror’s securityholding percentage in the class of securities.

Not applicable.

3.2  State whether the acquiror acquired or disposed ownership of, or acquired or ceased to have control over, the securities that triggered the requirement to file the report.

Not applicable.

3.3  If the transaction involved a securities lending arrangement, state that fact.

Not applicable.

3.4  State the designation and number or principal amount of securities and the acquiror’s securityholding percentage in the class of securities, immediately before and after the transaction or other occurrence that triggered the requirement to file this report.

See Item 3.5(a).  

3.5  State the designation and number or principal amount of securities and the acquiror’s securityholding percentage in the class of securities referred to in Item 3.4 over which

(a)  the acquiror, either alone or together with any joint actors, has ownership and control,

We were informed by the Issuer that there were 285,688,681 Common Shares outstanding as of May 6, 2025, and the percentages set forth below are calculated based on this amount.

The Acquiror beneficially owns, through the MHR Funds, 37,648,498 Common Shares of the Issuer, representing approximately 13.18% of the issued and outstanding Common Shares. In addition, Dr. Rachesky, through MHRC, MHRC II, Institutional Advisors III, Institutional Advisors IV and MHR Holdings, beneficially owns 37,867,658 Common Shares, representing 13.25% of the issued and outstanding Common Shares.

(b)      the acquiror, either alone or together with any joint actors, has ownership but control is held by persons or companies other than the acquiror or any joint actor, and

Not applicable.

(c)      the acquiror, either alone or together with any joint actors, has exclusive or shared control but does not have ownership.

Not applicable.

3.6  If the acquiror or any of its joint actors has an interest in, or right or obligation associated with, a related financial instrument involving a security of the class of securities in respect of which disclosure is required under this item, describe the material terms of the related financial instrument and its impact on the acquiror’s securityholdings.

Not applicable.

3.7  If the acquiror or any of its joint actors is a party to a securities lending arrangement involving a security of the class of securities in respect of which disclosure is required under this item, describe the material terms of the arrangement including the duration of the arrangement, the number or principal amount of securities involved and any right to recall the securities or identical securities that have been transferred or lent under the arrangement.

State if the securities lending arrangement is subject to the exception provided in section 5.7 of NI 62- 104.

Not applicable.

3.8  If the acquiror or any of its joint actors is a party to an agreement, arrangement or understanding that has the effect of altering, directly or indirectly, the acquiror’s economic exposure to the security of the class of securities to which this report relates, describe the material terms of the agreement, arrangement or understanding.

See Item 6.

Item 4   Consideration Paid

4.1  State the value, in Canadian dollars, of any consideration paid or received per security and in total.

Not applicable.

4.2  In the case of a transaction or other occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, disclose the nature and value, in Canadian dollars, of the consideration paid or received by the acquiror.

Not applicable.

4.3  If the securities were acquired or disposed of other than by purchase or sale, describe the method of acquisition or disposition.

Not applicable.

Item 5   Purpose of the Transaction

State the purpose or purposes of the acquiror and any joint actors for the acquisition or disposition of securities of the reporting issuer. Describe any plans or future intentions which the acquiror and any joint actors may have which relate to or would result in any of the following:

(a)  the acquisition of additional securities of the reporting issuer, or the disposition of securities of the reporting issuer;

(b)  a corporate transaction, such as a merger, reorganization or liquidation, involving the reporting issuer or any of its subsidiaries;

(c)  a sale or transfer of a material amount of the assets of the reporting issuer or any of its subsidiaries;

(d)  a change in the board of directors or management of the reporting issuer, including any plans or intentions to change the number or term of directors or to fill any existing vacancy on the board;

(e)  a material change in the present capitalization or dividend policy of the reporting issuer;

(f)  a material change in the reporting issuer’s business or corporate structure;

(g)  a change in the reporting issuer’s charter, bylaws or similar instruments or another action which might impede the acquisition of control of the reporting issuer by any person or company;

(h)  a class of securities of the reporting issuer being delisted from, or ceasing to be authorized to be quoted on, a marketplace;

(i)  the issuer ceasing to be a reporting issuer in any jurisdiction of Canada;

(j)  a solicitation of proxies from securityholders;

(k)  an action similar to any of those enumerated above.

The Common Shares reflected in this report were acquired for investment purposes. The Reporting Persons intend to review their holdings in the Issuer on a continuing basis and as part of this ongoing review, evaluate various alternatives that are or may become available with respect to the Issuer and its securities. The Reporting Persons may from time to time and at any time (in accordance with any trading policy of the Issuer or its subsidiaries and affiliates that may then be applicable to the Reporting Persons), in their sole discretion, acquire or cause to be acquired, additional equity or debt securities or other instruments of the Issuer, its subsidiaries or affiliates, or dispose, or cause to be disposed, such equity or debt securities or instruments, in any amount that the Reporting Persons may determine in their sole discretion, through public or private transactions or otherwise.

In addition to the foregoing, certain of the Reporting Persons are pursuing various alternatives with respect to the Issuer’s securities in order to create liquidity opportunities for limited partners of certain of the Reporting Persons. Among the alternatives being pursued, such Reporting Persons are considering forming a continuation vehicle or other special purpose vehicle that would continue to be controlled by certain of the Reporting Persons that would enable existing limited partners to achieve liquidity or continue their indirect investment in the Issuer, making an in-kind distribution to certain limited partners of certain of such Reporting Persons, or effecting a public or private transaction. The timing, and whether and how these alternatives can be effected, will depend on transaction and market terms and conditions, as well as legal, regulatory and other factors.

The Reporting Persons reserve the right to and may, from time to time and at any time, in their sole discretion, formulate and implement other purposes, plans or proposals regarding the Issuer or any of its subsidiaries or affiliates or any of their equity or debt securities as the Reporting Persons may deem advisable in their sole discretion. The information set forth in this Item 5 is subject to change from time to time and at any time, and there can be no assurances that any of the Reporting Persons will or will not take, or cause to be taken, any of the actions described above or any similar actions.

Item 6  Agreements, Arrangements, Commitments or Understandings With Respect to Securities of the Reporting Issuer

Describe the material terms of any agreements, arrangements, commitments or understandings between the acquiror and a joint actor and among those persons and any person with respect to securities of the class of securities to which this report relates, including but not limited to the transfer or the voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Include such information for any of the securities that are pledged or otherwise subject to a contingency, the occurrence of which would give another person voting power or investment power over such securities, except that disclosure of standard default and similar provisions contained in loan agreements need not be included.

In connection with the closing of the Separation Transactions, on May 6, 2025, the Issuer, the Acquiror and certain of its affiliates, Liberty Global Ventures Limited, a limited company organized under the laws of England and Wales (“Liberty Global”) and Liberty Global Ltd., an exempted company limited by shares organized under the laws of Bermuda (“Liberty Parent” and together with Liberty Global, “Liberty”), entered into an amended and restated investor rights agreement (the “LG Studios Investor Rights Agreement”). 

The LG Studios Investor Rights Agreement provides that (1) for so long as funds affiliated with the Acquiror beneficially own at least 10,000,000 Common Shares in the aggregate, the Issuer will include three designees of the Acquiror (at least one of whom will be an independent director and will be subject to approval of the Issuer’s board) on its slate of director nominees for election at each future annual meeting of the Issuer’s shareholders, (2) for so long as funds affiliated with the Acquiror beneficially own at least 7,500,000, but less than 10,000,000, Common Shares in the aggregate, the Issuer will include two designees of the Acquiror on its slate of director nominees for election at each future annual meeting of the Issuer’s shareholders, and (3) for so long as funds affiliated with the Acquiror beneficially own at least 5,000,000, but less than 7,500,000, Common Shares in the aggregate, the Issuer will include one designee of the Acquiror on its slate of director nominees for election at each future annual meeting of the Issuer’s shareholders. The initial designees of the Acquiror are Dr. Mark H. Rachesky, Emily Fine and John Harkey (who is designated as an independent director).

Under the LG Studios Investor Rights Agreement, the Issuer has also agreed to provide the Acquiror and Liberty with certain pre-emptive rights on Common Shares of the Issuer (or securities that are convertible or exercisable into or exchangeable for Common Shares) that the Issuer may issue in the future for cash consideration.

In connection with the execution of the LG Studios Investor Rights Agreement, on May 6, 2025, the Issuer, the Acquiror and certain of its affiliated funds, and Liberty entered into a Voting and Standstill Agreement (the “LG Studios Voting Amendment”).

Pursuant to the LG Studios Voting Amendment, the Acquiror and Liberty have agreed that for so long as any of them have the right to nominate at least one representative to the Issuer’s board, each of them will vote any Common Shares owned by them and their respective controlled affiliates in favor of each of the other’s respective director nominees, subject to certain exceptions set forth in the Voting and Standstill Agreement.

In connection with the closing of the Separation Transactions, on May 6, 2025, the Issuer, and certain affiliates of the Acquiror entered into a registration rights agreement (the “LG Studios Registration Rights Agreement”). 

The LG Studios Registration Rights Agreement provides that the affiliated funds of the Acquiror are entitled to two demand registration rights to request that the Issuer register all or a portion of their Common Shares. In addition, in the event that the Issuer proposes to register any of the Issuer’s equity securities or securities convertible into or exchangeable for Lionsgate’s equity securities, either for its own account or for the account of other security holders, the applicable affiliates of the Acquiror will be entitled to certain “piggyback” registration rights allowing them to include their shares in such registration, subject to customary limitations. As a result, whenever the Issuer proposes to file a registration statement under the U.S. Securities Act of 1933, other than with respect to a registration statement on Forms S-4 or S-8 or certain other exceptions, the applicable affiliates of the Acquiror will be entitled to notice of the registration and have the right, subject to certain limitations, to include their shares in the registration.

The registration rights described above of the applicable affiliates of the Acquiror will terminate on the first anniversary of the date that they both (i) beneficially owns less than 28,568,868 Common Shares (which amount represents approximately 10% of the Common Shares outstanding as of May 6, 2025), subject to equitable adjustment and (ii) ceases to have a designated representative on the Issuer’s board.

The foregoing descriptions of the LG Studios Investor Rights Agreement, the LG Studios Voting Amendment, and the LG Studios Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, which are attached to the Schedule 13D as Exhibit 99.1 through Exhibit 99.3 and which are incorporated by reference.

Item 7   Change in material fact

If applicable, describe any change in a material fact set out in a previous report filed by the acquiror under the early warning requirements or Part 4 in respect of the reporting issuer’s securities.

Not applicable.

Item 8   Exemption

If the acquiror relies on an exemption from requirements in securities legislation applicable to formal bids for the transaction, state the exemption being relied on and describe the facts supporting that reliance.

Not applicable.

SOURCE MHR Fund Management LLC