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Lionsgate Has Started Talks To Sell Epix Stake – Report

Deadline logo Deadline 1/26/2017 David Lieberman
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Now that it has completed its acquisition of Starz, Lionsgate has kicked off the process to sell its 31.2% stake in Epix to the joint venture’s other partners, MGM and Viacom, Reuters reports.

It has “initiated talks” the news service says, citing “people familiar with the matter.”

Valuation will be key. Brean Capital’s Alan Gould figures Lionsgate’s stake is worth about $458 million.

Analysts have expected Lionsgate to leave the Epix partnership after it agreed to pay $4.4 billion for Starz. But execs played coy when asked about the possibility.

At an Investor Day gathering this month CEO Jon Feltheimer said Epix “is very valuable and throwing off cash.” Lionsgate and partners Viacom and MGM will “realize the value which ever way we all decide is best for our companies.”

He later quipped that Lionsgate will “treat Starz just like any other third party customer that we paid $4 billion for.”

But it hasn’t been clear whether Viacom, which must reduce its debt, would be willing to buy a larger stake in Epix. Indeed, this month Stifel Research’s Ben Mogil said that a sale of Paramount’s Epix stake to Lionsgate might fetch $750 million making it a “very viable solution to recapitalize the studio” and “focus on wholly owned assets.”

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