Lionsgate Stock Rises on Speculation It Will Merge With Starz

Getty Images
Lionsgate CEO Jon Feltheimer

Shares of Starz also soared on a report that the two are in "advanced talks."

Shares of Lionsgate rose 4 percent Wednesday during a strong session in general on Wall Street, then jumped an additional 6 percent after the closing bell when speculation again focused on the possibility that the studio will merge with Starz.

This time around, Bloomberg reported that Lionsgate is in "advanced talks" to acquire Starz for more than $30 a share, and that the deal could be announced "in the next few days."

Starz shares closed at $28.25 on Wednesday, then shot up another 8 percent to $30.51 after the closing bell, suggesting that, should a deal get done, some investors are betting that the final price Lionsgate pays for Starz would exceed the $30 Bloomberg is reporting.

The Bloomberg report cites people with knowledge but does not name them. Lionsgate and Starz did not respond to a request for comment.

"An agreement has been very close to being signed for a week now and has been held up over disagreements on price and voting shares," said the Bloomberg report.

Starz and Lionsgate are already minority investors in each other, and media mogul John Malone owns shares of each and is on the board of directors at Lionsgate. Both Malone and Starz chairman Gregory Maffei have said on occasion that it would make sense to combine Starz and Lionsgate.

Starz, in fact, announced nearly five months ago in a regulatory filing that Lionsgate "intends to explore whether there is a potential mutually beneficial combination of the two companies."

Lionsgate, the studio behind such movie franchises as The Hunger Games, Saw, Divergent and John Wick, as well as such TV shows as Mad Men and Orange Is the New Black, sported a market capitalization of $3.1 billion on Wednesday.

Starz, which serves 32 million subscribers through its Starz Encore network of TV channels and produces original TV shows including Outlander, Survivor's Remorse and Power, had a market cap Wednesday of about $2.8 billion. 

comments powered by Disqus