Vancouver: Lions Gate Entertainment, which has released positive fourth-quarter financial results, is not considering purchase bids by Artisan Entertainment, contrary to other published reports.

An unnamed source close to the Vancouver-based mini-studio says Artisan approached Lions Gate with an unattractive stock-swap offer that didn’t proceed. Reports peg the offer at between $100 million and $150 million.

Rumors of the purchase, however, drove Lions Gate shares from $3.80 per share to almost $4.40 per share and back to the July 3 close of $3.80 in a matter days. Company shares have traded on the Toronto Stock Exchange in the $2 to $4.99 per share range in the past year.

Share optimism might also have been driven by a profitable fiscal 2001, as reported June 28.

Boosted by a strong fourth quarter, the year-end results show a profit of $8.7 million ($0.09 per share) on revenues of $282.2 million.

Overall revenues are up 4% over the year and fiscal 2000 reported a loss of $5.3 million ($0.22 per share).

The company’s non-cash losses, attributed to its stakes in Mandalay Pictures and Internet-based CinemaNow, continue to be significant drags on profits in fiscal 2001. Without Mandalay and CinemaNow, earnings would have reached $18.6 million.

While only the motion picture division increased in overall revenue, profit margins increased in all of Lions Gate’s core businesses, except Lions Gate Studios in North Vancouver.

Motion pictures improved 18.4% to $173.9 million for fiscal 2001, driven by the release of American Psycho and Shadow of the Vampire and the inclusion of Trimark’s video release and library sales.

Television revenue dropped 13% to $71.4 million due to fewer television movie deliveries. The first season of Mysterious Ways, made for PAX TV and NBC, drove revenues along with the non-fiction programming created by Termite Arts Productions in Los Angeles.

Lions Gate’s CineGroupe animation partnership dropped 16.6% to $29.7 million, in part because revenues skewed higher the previous year due to the release of Heavy Metal, which generated $11 million. In fiscal 2001, the animation division created 81.5 hours, including Wunchpunch, Mega Babies and MOW Lion of Oz.

Margins at Lions Gate Studios, meanwhile, were negatively impacted by increases in the company’s in-house production on site, which accounted for $1.5 million. Including the in-house production, Lions Gate Studios revenues would be about $7 million, which is consistent with previous years.

And CineGate, the company’s new production services tax-shelter business, contributed $1.6 million toward the year-end results.

Lions Gate’s fourth quarter reported profits of $4.1 million ($0.06 per share) on revenue, of $92.6 million. The same period in 2000 generated a loss of $3.7 million ($0.16 per share) on revenues of $70.2 million.

Lions Gate said it plans to increase its motion picture slate to up to 18 releases in 2002, including six to eight ‘significant’ in-house productions. *

-www.lionsgatefilms.com