Speculation is growing that Santa Monica’s Lions Gate Entertainment Corp. could buy pay-tv channel Starz.
Billionaire media mogul John Malone hinted a merger between the two entertainment companies was on the horizon at Wednesday’s annual meeting of his investment holding companies.
“Lions Gate could buy Starz and potentially other free radicals in the industry,” he told investors, according to Forbes.
Such consolidations can help smaller entertainment companies compete better against giants of the cable industry. Lions Gate certainly has the muscle to help Starz take on premium-TV rivals HBO and Showtime. The studio has produced big hits including AMC’s “Mad Men” and the blockbuster “Hunger Games” film franchise.
Malone is a director at Lions Gate and owns a three percent stake in the company after a stock-swap deal earlier this year that gave Lions Gate a 4.5 percent stake in Starz. Malone remains a major Starz shareholder, holding nearly one-third of the company’s voting shares.
The stock deal, announced in February, kicked off rumors that a Lions Gate-Starz match was forthcoming, but Malone’s comments this week cemented a merger as a possibility.
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