Lions Gate Entertainment Corp. (USA) LGF has once again embarked in talks to acquire Starz STRZA, Bloomberg reported. People familiar with the matter said that advisers from both companies are engaged in early stage negotiations, which may or may not result in a deal.
Starz spiked sharply as the market came to a close, up 1.8 percent on the day.
About a year ago, Lions Gate acquired a stake in the pay-TV network company, after desisting from buying the whole business due to valuation and tax issues. However, it seems like the entertainment company is once again interested in Starz.
"Billionaire John Malone, who controls Starz's voting shares, is interested in merging with Canadian-domiciled Lions Gate to lower the company’s taxes," Bloomberg said.
The people said that Malone waited until now (three years after Starz started trading as an independent company) to sell his stake to avoid potential problems with the IRS.
However, representatives from both companies declined to comment on the rumors.
Back in September, Bloomberg also reported that AMC Networks Inc AMCX was interested in acquiring Starz, but desisted due to valuation concerns as well.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
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