(Bloomberg) -- Activist investor Anson Funds Management has taken a stake in the Lionsgate Studios Corp. and is speaking with the studio behind The Hunger Games and John Wick about ways to unlock value.
Anson believes Lionsgate Studios is undervalued and that the company should consider a range of options, including a potential sale, after it completes a separation from the Starz cable and streaming service, said Sagar Gupta, the firm’s head of activism and a portfolio manager.
Gupta said Lionsgate Studios, thanks to its strong underlying revenue and deep content library, would appeal as a takeover target to traditional and digital media companies, as well as to major technology and artificial intelligence players.
Anson, a top-five independent shareholder in Lionsgate Studios, also thinks that the company could consider potential divestitures, including its unscripted television and 3 Arts businesses.
Anson has held constructive talks with Lionsgate Studios’ management and board. It contends that the company trades at a discount to peers such as Walt Disney Co. and Warner Music Group Corp. because of corporate governance issues and recent underperformance at the box office, including the recent flop of Megalopolis.
Anson supports Lionsgate Studios’ split with Starz and thinks the company should pursue alternative revenue streams, such as diving further into merchandising and events like Broadway shows, according to Gupta. Anson wants Lionsgate Studios to improve its financial disclosures.
“We always welcome the ideas and input of our shareholders,” a Lionsgate Studios spokesperson said.
Previously a subsidiary of Lions Gate Entertainment Corp., Lionsgate Studios went public this year via a merger with a special purpose acquisition company. The stock has fallen about 30% since then, giving the company a market value of $2 billion.
--With assistance from Thomas Buckley.
(Updates with Lionsgate Studios response in seventh paragraph)
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