CBS Corp has reportedly been working on plans to acquire Starz, a cable entertainment channel owned by Lions Gate Entertainment.
The media company is said to have tabled an informal offer to for the channel, which news outlet the Information reported was turned down. The publication cites four sources as saying that CBS’ interim CEO Joseph Ianniello offered close to $5 billion, but Lions Gate purportedly rejected it in favor of a higher valuation.
Despite that, CBS still maintains an interest in the acquisition, notes the Information report citing sources close to the development.
Both CBS and Lions Gate have not released any official statements regarding the allegations, Reuters noted on Friday, May 17, 2019.
Lions Gate acquired Starz for $4.4 billion in 2016, completing the purchase in a cash-and-stock agreement. Acquiring Starz would be a big move for CBS as it would see the company add popular shows like “Outlander,” “American Gods,” and “Power” to its entertainment library.
According to the report, CBS wants to acquire the studio as a potential complement to another platform that the media company wants to buy- Viacom Inc.
CBS reportedly approached Viacom with an offer on two occasions, but there was no deal. Viacom owns such channels as Nickelodeon, MTV, and Comedy Central- an undoubtedly attractive avenue to reach more viewers.
Per the tech publication The Information, CBS is aiming at investments worth $8 billion in 2019, with a majority going into programming.
Lions Gate LGF.A (NYSE) shares surged by over 15% on Friday, to trade at $15.60 after the news that CBS had made an offer for Starz hit the stock market.
The move by CBS follows a similar trend in the entertainment industry, with most companies seeking to consolidate. Disney, for instance, was able to close a deal that should see it acquire Fox assets. The California-based entertainment conglomerate is also preparing to launch a streaming service later this year.
Others like Comcast and Warner Bros. have been eyeing the streaming industry and are said to be ready to challenge Netflix and Amazon Prime.