Looks like Lionsgate’s courtship of Starz is still on, and that things are getting serious.
In a regulatory filing, Englewood-Colo.-based Starz said that Lionsgate “intends to explore whether there is a potential mutually beneficial combination of the two companies.”
Starz is owned by Liberty Global, a cable holding company that’s a spin-off of Liberty Media. Both companies are, in effect, controlled by Liberty Media Chairman John Malone.
The stage has been set for such a merger. Last February, Malone exchanged stock with Lionsgate, allowing him to join the company’s board. In exchange, Lionsgate received 14.5% of Starz’ voting shares. Malone remains Starz’ biggest shareholder with 32.1% of the votes.
In November, two John Malone-controlled companies, Liberty Global and Discovery Communications, each took a 3.4% stake in Lionsgate. Both companies’ heads, Liberty Global President and CEO Mike Fries and Discovery CEO David Zaslav, joined Lionsgate’s board.
The merger makes sense in a pay-TV environment in which premium cable network Starz and Lionsgate’s premium streaming service, Epix, co-owned by Paramount and MGM, are both competing with Time Warner-owned HBO and CBS-owned Showtime for top-end subscribers, as well as with subscription video on demand providers — such as Netflix, Amazon and Hulu — for cord-cutters.
Brief Take: Expect Lionsgate to acquire Starz in the next few months.
Read more: The Wall Street Journal, Deadline, Variety
[Image courtesy of The Wall Street Journal]
Tags: