6 Companies That Could Acquire 'The Walking Dead' Producer AMC

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Twenty-First Century FoxFOXA
stunned investors when it was revealed that the company
offered to acquireTime WarnerTWX
for $80 billion. The deal (which valued Time Warner at $85 per share) was ultimately rejected, but that hasn't stopped investors from buying the stock. As of this writing, Time Warner's shares are up more than 16 percent. Peer companies are also
on the move
.
AMC NetworksAMCX
, which has sparked M&A chatter for more than a year, rose more than five percent on Wednesday's news. AMC is famous for distributing some of the most popular shows on television, including
The Walking Dead
,
Mad Men
and
Breaking Bad
. The company (which has an intraday market cap of roughly $4.5 billion) is one of the strongest players in the entertainment space. Any merger would be big news for both investors and TV producers. Read on to see which companies are most likely to take control of the network.

Related Link: AMC's 'Low Winter Sun' Captures The "Beauty And Grime" Of Detroit

CBS
Albert Fried & Company analyst Rich Tullo and Sterne Agee analyst Vasily Karasyov told Benzinga that
CBSCBS
is one of the top contenders for an AMC buyout. The network already dominates primetime with a number of hit dramas and comedies. CBS' pay-TV channel, Showtime, is
second
only to Time Warner's HBO. By acquiring AMC, CBS would be in charge of one of the most important networks on cable.
ViacomViacomVIA
is famous for owning and operating a few key properties, including Paramount Pictures (which distributed the
Transformers
movies), MTV, Nickelodeon, BET, and Comedy Central. AMC would be a unique addition to this lineup. If nothing else, it could help Viacom gain some much-needed critical acclaim (the company isn't currently known for producing award-winning dramas). AMC could also bring new viewers to the Viacom family.

Related Link: 'The Killing' Could Have a Deadly Effect on AMC

Netflix
Even without a merger,
NetflixNFLX
and AMC are already pretty close. AMC uses the streaming video giant to promote and popularize its series.
The Walking Dead
, for example,
grew in popularity
because new viewers had a legitimate (piracy-free) way to catch up in between seasons. Tullo has been a strong supporter of a Netflix-AMC merger for more than a year. In 2013, he
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told Benzinga
why he thinks the two entities should unite. "AMC has 96 million cable subscribers," said Tullo. "That provides the cash flow in order to develop original content programming. Then when they do develop new, original content programming, you get a show like
The Walking Dead
, which demands $350,000 to $600,000 in advertising for a 30-second spot." Tullo said that this model works better for original content than Netflix's model "because you get the 10 million viewers monetized every week." "We think there's a synergy there between a company like Netflix and AMC," he added.
ComcastComcastCMCSA
is another company that appeared on Karasyov's list of possible buyers. This one could be difficult because Comcast already owns NBCUniversal. If Comcast attempted to buy AMC, it could look like the firm is trying to monopolize the pay-TV business. Comcast could eliminate that perception by bringing AMC's shows to
Hulu
, a move that is unlikely to occur with AMC's current owners.
DisneyDisneyDIS
loves a good property. From
Star Wars
and
The Avengers
to
Frozen
and a plethora of hit TV series, the company has done everything it can to maximize returns. After
acquiring
Lucasfilm, Disney announced that it would make three
Star Wars
sequels and a number of spin-offs. There will be new
Star Wars
attractions at its theme parks and truckloads of merchandise for kids to buy. AMC has not produced a single property that could rival Lucasfilm or Marvel. The same could be said for ABC, but that didn't stop Disney from acquiring that network.
Fox
Karasyov also believes that Fox may be interested in acquiring AMC. From a programming perspective, a Fox-AMC union makes perfect sense. Both companies are known for producing some of the darkest dramas. If they worked together on all of their new shows, the results could be very impressive. That said, investors might feel that AMC is a weak substitute for Time Warner. AMC has
The Walking Dead
, but Time Warner has
Batman
,
Harry Potter
, and numerous others. How can AMC compete with that? Disclosure:
At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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Posted In: NewsRumorsM&ATechAlbert Fried & CompanyAMCBatmanBreaking BadCBSComcastdisneyFoxHarry PotterLucasfilmMad MenRich TulloStar WarsSterne AgeeThe KillingThe Walking DeadTime WarnerTwenty-First Century FoxVasily Karasyov
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