Lionsgate today confirmed today that it remains on track to separate Starz and its studio business despite volatile markets noting that it’s now focusing on spinning out the studio, instead of the other way around.
“As negotiations progress we have increased our focus on the possibility of spinning our studio business, creating a number of financial and strategic benefits. In that regard, we are continuning productive negotiations with prospective strategic and financial partners on both sides of our business,” the company said in an SEC filing Wednesday.
It said it remains on a path to complete a transaction despite “volatile market conditions.”
Lionsgate initially announced last fall it was exploring strategic options that included a potential spinoff Starz, splitting the businesses in order to realize greater value for both as separate entities with a deal to be announced by late summer to close in early spring. That deadline has slipped a bit but the company today confirmed it’s still on track. In August, Lionsgate executives noted that talks had expanded to include the studio as well given interest from potential investors in that business.
Lionsgate acquired Starz for $4.4 billion in 2016. The cable network and streaming service and shas been growing fast under Jeff Hirsch but failed to provide a stock price bump for its parent, which calculated that selling all or a part of the asset could unlock value.
Potential partners are said to include Vivendi’s Canal+ and private equity, among others. A separation could also make both the studio and Starz easier targets for more M&A down the road.
At a media conference earlier this month, Lionsgate vice chairman Michael Burns stressed that interlocking relationships between the two business would continue. The company also announced Wednesday that its Starzplay international streaming service will rebrand as Lionsgate+ in 35 countries outside the U.S. in a redesign rolling out tomorrow.