Elliott Sells Studio Stake To Burkle

Jan 24 2012 | 2:12pm ET

Elliott Associates has completed its deal to sell most of its stake in movie studio Relativity Media.

The hedge fund, which had owned 49% of the studio, sold a majority of that stake to private equity billionaire Ron Burkle. Elliott, which has invested more than $1 billion in Relativity, remains the studio's third-largest shareholder; the largest shareholder is CEO Ryan Kavanaugh.

Burkle in December threw Relativity a lifeline in the form of a $200 million loan to cover marketing and production costs for two movies.

"We've spent a lot of time analyzing the media industry, and have looked at virtually every asset out there," Burkle said. "Relativity makes sense. They run their business like a business, focusing on profitability, internal rates of return and the factors that many Hollywood based businesses don't focus on. Their platform and foundation is unparalleled, and I believe together we will be able to grow the business in a manner which continues to evolve the industry and sets new benchmarks."

Kavanaugh has been seeking a buyer for Elliott's stake for months, after the hedge fund started to rein in its financing.


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