Film studio Lionsgate said it would buy television network Starz for $4.4 billion in cash and stock. Bobbi Rebell reports.
The studio behind the hit Hunger Games blockbusters, Lionsgate, is buying Starz, a television network with its own hit productions including "Outlander." The cash-and-stock deal worth about $4.4 billion with debt makes a lot of sense, says Amy Yong of Macquarie Securities. (SOUNDBITE) AMY YONG, ASSOCIATE DIRECTOR, EQUITY RESEARCH ANALYST, MACQUARIE SECURITIES (ENGLISH) SAYING: "For Lionsgate, Starz brings a ton of visibility to earnings. It's a subscription-based business with strong cash flow characteristics. And for Starz, Lionsgate has done an amazing job at producing TV hits, and, obviously, they have a huge library of content on the movie side." Lionsgate will pay $32.70 per share for Starz, representing a premium of nearly 16 percent to Starz's closing price on Wednesday. There was a long courtship- the two companies held on and off talks for more than a year, with Starz playing the field- holding talks with rival suitors including Twenty-First Century Fox, CBS, and AMC Networks. But ultimately, it is walking down the aisle with Lionsgate. The companies are expected to seal the deal by the end of the year.