Lionsgate Studios Corp. (LION) stock jumped more than 16% Tuesday after a report said Apollo Global Management-backed Legendary Entertainment had revived takeover talks and submitted an offer to acquire the film and television studio.
The companies have held intermittent discussions since 2025, Bloomberg reported, citing people familiar with the matter.
Legendary first approached Lionsgate after its separation from Starz Entertainment Corp. (STRZ) in May 2025. The move made Lionsgate a standalone film and television production company.
Legendary Eyes Lionsgate's $1 Billion Content Library
A potential deal would bring together two major Hollywood studios and expand Legendary's film and television portfolio.
Lionsgate operates film and television production and distribution businesses. It also owns a library of more than 20,000 titles, including the popular "The Hunger Games" and "John Wick" franchises.
The library generates roughly $1 billion in annual revenue, making it a valuable asset for a potential buyer.
Moreover, an acquisition would give Legendary access to Lionsgate's established theatrical distribution network. That could allow Legendary to distribute its own films rather than rely on outside studios.
The combination could also reduce corporate costs and strengthen licensing opportunities, Variety reported in July 2025.
Activist Pressure Adds Urgency To Potential Sale
The renewed takeover interest comes as Lionsgate faces pressure from activist investor Anson Funds.
The investment firm has pushed Lionsgate to explore a sale or adopt artificial intelligence to improve its business, according to TheWrap.
Meanwhile, Legendary brings major Hollywood franchises to the table. The studio is known for producing films in the "Dune" franchise and "A Minecraft Movie."
According to its website, Legendary's associated productions have generated more than $20 billion at the worldwide box office.
The studio is owned by Apollo Global Management Inc. (APO) and Legendary's management.
Deal Valuation Remains Unclear
The reported offer marks another step in the companies' discussions. However, the proposed purchase price, deal structure and potential closing timeline remain undisclosed.
Representatives for Legendary, Lionsgate and Apollo declined to comment, according to Bloomberg. There is no guarantee the talks will result in a completed transaction.
Lionsgate had a market capitalization of approximately $3.16 billion as of Monday's close. As of June 30, the company held $425.8 million in cash and cash equivalents.
Earnings and Analyst Outlook
Lionsgate's next major scheduled catalyst is its Nov. 5 earnings report.
Analysts expect an earnings loss of 2 cents per share, compared to a loss of 20 cents a year earlier. Revenue is projected to reach $650.67 million, up from $475.10 million.
The stock carries a Buy rating with an average price forecast of $15.25. Recent analyst moves include:
- JP Morgan: Initiated with Underweight (Target $9.00) (Sept. 25)
- Citizens: Initiated with Market Outperform (Target $18.00) (Sept. 14)
- B. Riley Securities: Neutral (Lowers Target to $16.00) (Aug. 10)
LION Price Action: Lionsgate Studios shares were up 16.38% at $12.36 at the time of publication on Tuesday, according to market data.
