MHR Fund Management Acquires Additional Class A Voting Shares of Lions Gate Entertainment Corp.

On November 16, 2022, November 17, 2022 and November 18, 2022, an investment fund affiliated with MHR Fund Management LLC acquired 871,380 Class A voting shares, no par value of Lions Gate Entertainment Corp., representing an aggregate of approximately 1.04% of the 83,394,680 issued and outstanding Class A Voting Shares as of November 18, 2022, through the following open market purchases on the New York Stock Exchange:

• on November 16, 2022, 236,585 Class A Voting Shares at a weighted average price of C$9.2370[1] (US$6.9394) per Class A Voting Share;
• on November 17, 2022, 234,795 Class A Voting Shares at a weighted average price of C$8.9131[2] (US$6.6765) per Class A Voting Share; and
• on November 18, 2022, 400,000 Class A Voting Shares at a weighted average price of C$9.2344[3] (US$6.8991) per Class A Voting Share.

This news release does not constitute an offer to sell or the solicitation of an offer to buy Class A Voting Shares.

The acquiring MHR Fund is MHR Institutional Partners IV LP (“Institutional Partners IV“). Fund Management is an affiliate of and has an investment management agreement with Institutional Partners IV. MHR Holdings LLC (“MHR Holdings“) is the managing member of Fund Management. MHR Institutional Advisors IV LLC (“Institutional Advisors IV“) is the general partner of Institutional Partners IV.  Mark H. Rachesky, M.D. (“Dr. Rachesky“) is the managing member of MHR Holdings and Institutional Advisors IV.  Dr. Rachesky, Fund Management, MHR Holdings and Institutional Advisors IV are collectively referred to herein as the “Reporting Persons”.

Prior to the transactions on November 16, 2022, November 17, 2022 and November 18, 2022, Fund Management beneficially owned, through various affiliated investment funds, 19,256,280 Class A Voting Shares and 15,105,522 Class B Non-Voting Shares. In addition, Dr. Rachesky owned: (i) 66,390 Class A Voting Shares directly; (ii) 68,961 Class B Non-Voting Shares directly; (iii) 2,434 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which are scheduled to vest in three equal annual installments beginning on September 13, 2023; (iv) 2,583 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which are scheduled to vest in three equal annual installments beginning on September 13, 2023; (v) 1,267 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which are scheduled to vest in two remaining equal annual installments beginning on September 14, 2023; (vi) 1,379 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which are scheduled to vest in two remaining equal annual installments beginning on September 14, 2023; (vii) 864 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which are scheduled to vest in one remaining annual installment on September 15, 2023; and (viii) 937 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which are scheduled to vest in one remaining annual installment on September 15, 2023. Collectively, prior to the transactions described, various investment funds affiliated with Fund Management and Dr. Rachesky owned approximately 23.18% of the Class A Voting Shares outstanding and approximately 10.44% of the Class B Non-Voting Shares outstanding, each calculated on an undiluted basis.

As a result of the transactions described, Fund Management and its joint actors (collectively, “MHR“) may be deemed to be the beneficial owners of 20,198,615 Class A Voting Shares representing approximately 24.22% of the Class A Voting Shares and 15,179,382 Class B Non-Voting Shares representing approximately 10.44% Class B Non-Voting Shares outstanding, each calculated on an undiluted basis. Of this amount, Dr. Rachesky owns (i) 66,390 Class A Voting Shares directly, (ii) 68,961 Class B Non-Voting Shares directly, (iii) 2,434 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which are scheduled to vest in three equal annual installments beginning on September 13, 2023; (iv) 2,583 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which are scheduled to vest in three equal annual installments beginning on September 13, 2023; (v) 1,267 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which are scheduled to vest in two remaining equal annual installments beginning on September 14, 2023; (vi) 1,379 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which are scheduled to vest in two remaining equal annual installments beginning on September 14, 2023; (vii) 864 restricted share units, payable upon vesting in an equal number of Class A Voting Shares, which are scheduled to vest in one remaining annual installment on September 15, 2023; and (viii) 937 restricted share units, payable upon vesting in an equal number of Class B Non-Voting Shares, which are scheduled to vest in one remaining annual installment on September 15, 2023.

The Class A Voting Shares were acquired pursuant to the normal course purchase exemption from the take-over bid procedure described by securities legislation. The exemption is available as the purchase was made for not more than 5% of the outstanding Class A Voting Shares and the aggregate number of Class A Voting Shares acquired in reliance on this exemption by MHR Funds and any person acting jointly or in concert with the MHR Funds within the previous 12-month period do not exceed 5% of the Class A Voting Shares outstanding at the beginning of such 12-month period.

The Class A Voting Shares were acquired for investment purposes based on the view that the Class A Voting Shares represented an attractive investment opportunity. MHR reviews its holdings in Lions Gate on a continuing basis and as part of this ongoing review, evaluates various alternatives that are or may become available with respect to Lions Gate and its securities. MHR may from time to time and at any time, in its sole discretion, acquire or cause to be acquired, additional equity or debt securities or other instruments of Lions Gate, its subsidiaries or affiliates, or dispose or cause to be disposed, such equity or debt securities or instruments, in any amount that MHR may determine in its sole discretion, through open market transactions, privately negotiated transactions or otherwise.