Television

Lionsgate Stock Jumps on Report of CBS Offer to Buy Starz

Shares of Lionsgate have jumped nearly 15% in the wake of a report that CBS Corp. has made an informal, $5 billion bid for the company’s Starz cable network.

Lionsgate stock surged $2 to close at $15.60 in Friday trading on the New York Stock Exchange, then gained another 10 cents in after-hours trading.

According to the Information, CBS is looking at a deal as a potential complement to Viacom — which CBS is considering acquiring. The report said CBS interim CEO Joseph Ianniello made the offer several weeks ago to Lionsgate executives, who turned it down. Despite being spurned, CBS remains interested in a deal for Starz.

CBS declined to comment and reps for Lionsgate did not immediately respond to a request for comment. Shares of Lionsgate have declined by 36% in the last 12 months, with a 52-week high of $27.88.

Lionsgate reported in February that its earnings and operating income had topped Wall Street projections, thanks to growth from Starz. Revenues were down 18% to $933.2 million, which fell short of Wall Street’s estimate of $1 billion. Starz ended the quarter with 25.1 million overall domestic subscribers, up 1.1 million subscribers from the prior-year quarter, and achieved strong over-the-top subscriber growth.

Lionsgate bought Starz, which includes the “American Gods,” “Vida,” “Power” and “Outlander” series, for $4.4 billion in late 2016.

Speculation about mergers has risen in recent months following Disney buying most of 21st Century Fox’s assets for $71.3 billion, and AT&T acquiring Time Warner for $85.4 billion. Disney and the resulting WarnerMedia are planning streaming services to compete with Netflix and Amazon.

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