Macquarie Private Portfolio Management Limited, the largest institutional shareholder in Magna Pacific, yesterday indicated that it would accept Lionsgate's takeover offer for its 12.1m shares, which represents 11.23% of the ordinary shares. Lionsgate has also acquired some additional shares through market purchases.
Ultimately it will be the shareholders who decide whether Lionsgate does swallow up the company: it is a condition of the offer that it gets more than 50% of all shares.
Lionsgate Australia is a wholly-owned subsidiary of Lionsgate Entertainment Corp, which operates the biggest independent film distributor in the US. It has been slowly establishing a direct presence in key territories, starting with the UK and Australia.
Lionsgate Australia chairman Simon Franks said Magna Pacific was a company in decline and its packing and warehousing assets would be useful in Lionsgate's intention of being a strong force in Australia. The parent company has a library of 10,000 titles. Magna Pacific handled Lionsgate content in the home entertainment arena up until late last year.
In recent years Magna Pacific has been trying to ramp up its presence in cinemas; theatrical distribution will be a big part of the new operation with as many as 25 films being distributed per year, including local films. Lionsgate also intends to finance Australian films, providing it can identify appropriate scripts. It has an output deal with the Nine Network.
Franks became chairman of Lionsgate UK after selling the film distribution division of the Redbus Group he set up to Lionsgate for $42m in 2005.