Here's Why Roku Collaborated With Apollo

  • Roku, Inc ROKU has collaborated with private-equity firm Apollo Global Management, Inc APO to bid for a minority stake in the pay-TV and streaming service Starz, the Wall Street Journal reports.
  • Roku and Apollo could acquire up to a 20% stake in Starz.
  • Still, the partners are yet to agree on a valuation with movie and television production company Lions Gate Entertainment Corporation (NYSE: LGF-A).
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  • Lions Gate VC Michael Burns acknowledged that the recent deals in the media space gave the company confidence to consider selling or spinning off Starz.
  • Selling Starz could potentially make Lions Gate an acquisition target as big players hunt for fresh content.
  • In November, movie and television production company Lions Gate declared its plans to sell or spin-off Starz. 
  • Selling a stake in Starz would help Lions Gate raise cash and place a value on the premium channel. 
  • Starz is known for series like "Outlander" and "Power." 
  • Lions Gate acquired Starz for $4.4 billion in 2016 but failed to fulfill the deal's promise, with the combined company now worth $3 billion.
  • Lions Gate and Roku forged a deal to see the studio's films run exclusively on the free, ad-supported Roku Channel after being aired on Starz.
  • Price Action: ROKU shares closed higher by 0.8% at $103.95 on Tuesday.
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