Lionsgate Exploring Merger With Starz

4 Feb, 2016 By: Erik Gruenwedel

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Lionsgate’s oft-speculated acquisition interest in Starz LLC gathered legitimacy following a Feb. 4 on the matter.

“Lionsgate has informed the issuer that it intends to explore whether there is a potential mutually beneficial combination of the two companies,” read the filing.

In addition to theatrical and original TV productions, Lionsgate and Starz both operate robust home entertainment units — the latter through Anchor Bay Home Entertainment.

Speculation regarding Lionsgate’s interest in Starz has percolated ever since cable industry mogul John Malone acquired a 3.3% stake in the Santa Monica, Calif.-based studio/distributor behind the "Twilight,” “Hunger Games” and “Divergent” movie franchises.

Malone’s Liberty Global conglomerate is reported to be the largest cable operator in the world. Lionsgate owns a stake in pay-TV platform Epix, and has aggressively sought international distribution, including digital, for its TV productions and movies.

Last year, the two companies engaged in a stock swap whereby Lionsgate acquired 4.5% of Starz stock, which included 14.5% voting shares. In that deal, Malone, whose Liberty Media spun off Starz in 2013, gained a seat on Lionsgate’s board.

Regardless, whether a merger occurs remains up in the air due to a variety of factors, including valuation of each company, according to the filing.

“There can be no assurance that there is or will be any such combination, that such combination would be acceptable to either the Issuer or its shareholders, or that the structure, price, mix of consideration and terms that such a combination could take or the time that it could take to determine whether or not there is such a combination will occur.”

 

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