Key Takeaways
- Lionsgate shares jumped 15% today after Bloomberg reported that Apollo-backed Legendary Entertainment has made a takeover offer for the studio.
- The two companies have talked on and off since July 2025, so a formal offer makes a deal look more likely than ever, though no price was reported and nobody has confirmed it.
- A buyer would take on about $1.9 billion of corporate debt plus loans tied to Lionsgate’s film and TV slate, against $340 million of cash at the end of March.
- The price of the offer is what to watch, and Lionsgate’s next quarterly report should come in early November.
Lionsgate Studios (LION) shares jumped 15% today. Bloomberg reported that Legendary Entertainment has revived talks to buy the John Wick studio and has made a takeover offer. Legendary made Dune and A Minecraft Movie, and it’s backed by Apollo Global Management (APO).
Trading was briefly halted for volatility at 12:39 p.m. ET as the news hit.
This time, there’s an offer
Legendary first weighed a takeover in July 2025, not long after Lionsgate split off its TV network and streaming business. Back then, the talks were about making a handful of films together, so Legendary could see how the two worked as partners before it decided whether to bid.
The two have reportedly talked on and off ever since. A formal offer puts things well past that trial run.
Still, the report didn’t give a price. Legendary, Lionsgate and Apollo, which owns Legendary along with its management, all declined to comment.
It’s easy to see what Legendary would get. Lionsgate’s film and TV library includes The Hunger Games and John Wick, and it reportedly brings in roughly $1 billion a year. A deal would also give Legendary its own theatrical distribution network.
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The debt comes with it
A buyer would be paying for more than the shares. Lionsgate’s total debt has stayed above $4 billion in every fiscal year since 2022, while its cash has never reached $400 million.
About half of the $4.19 billion at the end of March is corporate debt, roughly $1.9 billion. Most of the rest is loans tied to specific films and shows, which get repaid around the time those titles come out.
So on top of a market value of about $3.2 billion going into today, Legendary would be looking at more than $5 billion before it paid any premium.
The stock is now pricing in a deal
Going into today, the market wasn’t pricing in much chance of a deal.
Lionsgate traded at 28.8x forward earnings at yesterday’s close, almost exactly its three-year average of 28.6x. After today’s jump it’s closer to 33x. That’s well above its average, though nowhere near its 87x peak last December.
My take: after more than a year of on-and-off talks, a formal offer is the strongest sign yet that Lionsgate will find a buyer. But there’s no price on the table and a lot of debt comes with the company, so I’d want to see Legendary’s number before paying an above-average multiple for the stock.
Of course, the talks could still fall apart. Lionsgate’s next quarterly report should come in early November, and it’s the next chance to hear from management.
So what is Lionsgate stock actually worth?
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Disclaimer:
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