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Lionsgate could sell studio along with Starz

Illustration: Aïda Amer/Axios

Lionsgate may finally be ready to sell. Executives said on the earnings call Thursday that buyers have expressed interest in both its forthcoming Starz deal and its studio business.

Why it matters: Lionsgate heads a list of small/midsize media companies that remain unwed amid a wave of corporate marriages across the space. Any deal for Lionsgate could trigger the next round of musical chairs in the entertainment business.

Driving the news: "There seems to be a group of investors that really like the streaming side and the platform side. And there's another that understand the immense value that we have, really, after the MGM sale to Amazon," CEO Jon Feltheimer told analysts during the company's quarterly earnings call.

  • Any transaction that would include the studio would value it separately from Starz. "We still have to create a vehicle so that we can value both sides separately," Feltheimer said.

The big picture: Lionsgate has steered clear of M&A talk for years, despite being a hot name in Hollywood deal circles. But then Amazon paid a 40% premium to buy MGM, an acquisition that closed in March.

  • The $8.5 billion price that Amazon paid makes Lionsgate "the only real, actionable investment" left, Feltheimer said before comparing his company favorably to MGM. "Our library is better than the MGM library."
  • It's not clear whether Lionsgate is looking for a buyer or an investor because executives were light on any specifics. Indie studio and distributor A24 initially sought a buyer before taking a $225 million investment.

What's next: Lionsgate expects to announce its Starz deal next month, with a close by the spring.

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