These spinoffs don’t inspire us

Article Excerpt

Each of these two firms recently decided to merge one of its businesses with another firm instead of pursuing a full spinoff. While these moves improve their outlook, we feel there are better opportunities for your spinoff gains. LIONS GATE ENTERTAINMENT CORP. $10 is a hold. The company (New York symbol LFG.A; Consumer sector; Shares outstanding: 235.0 million; Market cap: $2.4 billion; No dividend paid; Takeover Target Rating: Lowest; www.lionsgate.com) produces movies and TV shows. Its library of over 18,000 titles includes popular franchises such as The Hunger Games and John Wick. In addition, the company owns the Starz pay-tv service. In March 2023, Lions Gate announced that it would spin off its movie and TV studio business as a separate firm. However, in December 2023, it opted instead to merge that business with Screaming Eagle Acquisition Corp., a special purpose acquisition company (SPAC). A SPAC raises money from investors without providing a detailed business plan. Its next goal is to find another business to buy, giving the purchased…