Lionsgate CEO John Feltheimer said the company plans to reveal its plans stars by late summer and closing a deal by next spring as the monetization of the premium channel and banners moves forward.
He also hinted that more mergers and acquisitions could be in store for both Lionsgate and Starz if the two companies were separate.
“We are targeting announcing our plan by the end of the summer and expect the transaction to close early in the fourth quarter of the fiscal year,” the CEO said on a conference call to discuss the company’s latest earnings. Lionsgate’s fiscal year ends in March.
Feltheimer said the company was engaged in talks with bankers and “a number of potential strategic partners.”
Canal +, a division of the French conglomerate VivendiHe was in the mix as a potential student as he did Roku management and Apollo Global jointly bid for a minority stake. DirecTV is also interested.
Lionsgatewhich acquired Starz for $4.4 billion in 2016. It announced last fall that it was exploring strategic options for the rapidly growing cable and broadcast network under Jeff Hirsch’s stewardship but failed to provide a bump for its mother, who calculated selling all or part of the original could That unlocks the value.
The company beat broadcast analyst consensus last quarter, adding subs to total 35.8 million. The bulk is Starz – up 47% year over year – with 12.8 million from the StarzPlay International alliance, an increase of nearly double that.
“Although live streaming is not an end in itself, it is a very effective way to deliver content to our customers around the world,” said Feltheimer.
When asked during a question-and-answer session to clarify Starz’s plans, he confirmed that the plan was to separate Starz from Lionsgate, which would keep a stake, barring anything unexpected.
“The main motivation for the separation is that we don’t feel like the street gives us value for the sum of the parts. We feel that as the two companies separate, they can both focus on their core businesses and my sense is that they will see some opportunities, some strategic opportunities, that they may not see during the merger of the two companies.”
“But frankly, anything can happen and that’s why we’re not giving you more details at the moment,” he said.
Lionsgate stock took a beating in a choppy market that has been a bit low in flow lately. It fell 3.7% during today’s session but rose 4% in late trading. The number and the quarterly call came after the market closed. At around $11, the stock is still far from its week high of $52 of $21.
Feltheimer admitted that, “This kind of environment is throwing a damper on just about everything. It’s hard to see our stock hurt when we’ve had…a huge value creation year.” He emphasized that Starz isn’t chasing the big competitors in live broadcasts but remains a free niche service. of ads to be “layered” on top of them.
“I don’t think the street realizes this. I hope potential partners will.”
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