Lionsgate (LGF) To Buy Starz For $4.4 Billion

Outlander network, Starz, just got a nice buyout price at about $4.4 billion. In the latest round of media consolidation, hit movie studio Lionsgate has agreed to purchase the Starz premium cable channel.

Lionsgate is the studio behind “The Hunger Games” movie franchise. In the deal, the company will first change its stock, with each share splitting into half of a voting share and half of a nonvoting share.

Owners of Starz A shares will receive $18 a share in cash and 0.6784 of a nonvoting Lionsgate share. Holders of Starz B shares will receive $7.26 in cash and both 0.6321 of a share of Lionsgate voting stock and 0.6321 of a share of Lionsgate nonvoting stock.

The offer values Starz A shares at $32.21 each. Based on Wednesday’s closing prices, this is roughly a 14 percent premium
Starz had just recently announced that Mr. Chris Albrecht had renewed his contract to remain as chief executive of the company through 2020.

Lionsgate Chief executive, Jon Feltheimer, suggested that Mr. Albrecht would retain an important role in the combined company. “We expect Chris not only to continue to run Starz, but also to have a major participation and leadership of the entire combined company,” he said.

The deal is expected to close by the end of the year, pending approval by shareholders and regulators.

Disclaimer: We have no position in Lions Gate Entertainment Corp. (NYSE: LGF) and have not been compensated for this article.