Form 4: Warner Bros. Discovery Subsidiary Divests Entire Stake in Starz Entertainment for $5 Million

Discovery Lightning Investments Ltd., a subsidiary of Warner Bros. Discovery, has sold its remaining 353,334 common shares of Starz Entertainment Corp. for $5 million in a private transaction.

Summary

• Discovery Lightning Investments Ltd. (DLI), an indirect wholly-owned subsidiary of Warner Bros. Discovery, Inc. (WBD), sold 353,334 common shares of Starz Entertainment Corp. (the "Issuer").
• The transaction was a private sale to MHR Capital Partners Master Account LP and MHR Capital Partners (100) LP (together, the "MHR Entities").
• The aggregate cash consideration for the sale was $5,000,000.
• The per-share price for the transaction was approximately $14.1509.
• The agreement for the sale was entered into on June 2, 2025, and the transaction was consummated on June 3, 2025.
• Following the consummation of this transaction, DLI ceased to own any Common Shares of Starz Entertainment Corp.
• WBD disclaims beneficial ownership of the reported securities, except to the extent of its pecuniary interest therein.
• Prior to this transaction, the Reporting Persons (WBD and DLI) may have been deemed members of a "group" beneficially owning more than 10% of Starz Common Shares, as described in Starz's Form 8-K filed on May 7, 2025.

Sentiment

Score: 3

Explanation: The sentiment is negative for Starz Entertainment Corp. due to the complete divestment by a significant institutional holder. While it's a strategic move for the seller, it signals a withdrawal of investment from the issuer's perspective.

Negatives

• A significant holder, Discovery Lightning Investments Ltd. (a Warner Bros. Discovery subsidiary), has completely divested its entire stake in Starz Entertainment Corp., which could be perceived negatively by the market for Starz.

Risks

• The filing is made as a precautionary matter, and the Reporting Persons expressly disclaim admission of being a member of a "group" or subject to Section 16 reporting requirements, indicating potential legal or compliance sensitivities around their prior ownership status.

Future Outlook

The document indicates that Discovery Lightning Investments Ltd. no longer holds any common shares of Starz Entertainment Corp. following this transaction, signifying a complete exit from its investment in Starz by this entity.

Management Comments

• Warner Bros. Discovery, Inc. expressly disclaims beneficial ownership of the reported securities, except to the extent of its pecuniary interest therein.
• The filing is being made as a precautionary matter and shall not be deemed an admission that any of the Reporting Persons was a member of a group or subject to the reporting requirements of Section 16 of the Act.

Industry Context

This divestment by a Warner Bros. Discovery subsidiary from Starz Entertainment Corp. reflects a strategic portfolio adjustment within the media and entertainment sector, potentially indicating a focus shift or a realization of investment value by WBD.

Stakeholder Impact

• Shareholders of Starz Entertainment Corp. may view the complete divestment by a major holder as a negative signal, potentially impacting investor confidence and the stock's valuation.
• The MHR Entities, as the purchasers, have increased their stake in Starz Entertainment Corp.

Key Dates

Recommendation

Keywords

Warner Bros. Discovery, Starz Entertainment, Discovery Lightning Investments, SEC Form 4, beneficial ownership, divestment, private transaction, equity sale, MHR Capital Partners