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By Joe Flint
CBS Corp. has had talks with Lions Gate Entertainment Corp. about acquiring its pay-TV channel Starz, according to people familiar with the matter.
The talks between the two companies started in recent weeks and a price of about $5 billion was floated by CBS, one of the people close to the situation said. The CBS board of directors also gave a green light to the company to pursue the acquisition, another person said.
No formal offer has been made by CBS and nothing is imminent, another person with knowledge of the matter said. People close to Lions Gate said the film and movie production company is seeking a higher price than what CBS initially suggested.
The Information earlier reported on the talks about a potential Starz sale to CBS. Lions Gate's stock rose 15% on Friday following the report.
CBS, which already owns the pay-TV channel Showtime, came close to acquiring Starz in 2016 but lost a bidding war to Lions Gate, which bought the company for $4.4 billion. The CBS bid was lower in part because it had concerns at the time about the ability of Starz to complete a new distribution deal with AT&T Inc.'s satellite broadcaster, DirecTV.
The discussions with Lions Gate come at the same time CBS and its sister company, Viacom Inc., are again expected to consider a merger. Both companies are controlled by National Amusements Inc., whose president, Shari Redstone, has been eager to see a deal.
CBS and Viacom have twice in recent years tried to recombine but have been unable to come to terms on a deal.
For Lions Gate, a sale of Starz would be an admission that the acquisition wasn't the game-changing deal it had anticipated.
The Lions Gate-Starz marriage was troubled from the start. Longtime Starz Chief Executive Chris Albrecht departed earlier this year after clashes with Lions Gate leadership over strategy. Starz under Mr. Albrecht was reluctant to buy shows from Lions Gate, preferring instead to make its own or acquire some from other suppliers.
A Starz sale would give Lions Gate a much-needed cash infusion at a time its movie and television units have struggled.
If CBS does acquire Starz, the deal could face scrutiny from lawmakers. While AT&T's HBO is the dominant pay-TV channel, a Starz-Showtime tie-up would give CBS ownership of two of the three major premium channels.
Write to Joe Flint at email@example.com
(END) Dow Jones Newswires
May 17, 2019 16:45 ET (20:45 GMT)
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