MGM Negotiates to Acquire All of Epix

As per a source, MGM is in active negotiation with Epix to acquire all its premium cable network, which it doesn’t own from partners Lionsgate and Viacom. This ground-breaking deal is valued between $1 billion and $2 billion

The news was followed after January when Lionsgate started selling off the 31.2 percent stake it had in Epix, just a month after mini-major accomplished its $4.4 Billion purchase of Starz. However, Viacom owns 50 percent. The deal with MGM seems to happen in the near future; however, if they come across a suitor who would be better than MGM they would likely opt for them.

After the acquisition of Starz, it was quite obvious that Lionsgate would leave the Epix collaboration, but when asked about the same, the executives didn’t give any details.

In January, at an Investor Day gathering, the Chief Executive Officer (CEO) Jon Feltheimer said Epix “is very valuable and throwing off cash.” He further added that Lionsgate and associates MGM and Viacom would “realize the value whichever way we all decide is best for our companies.”

Feltheimer later bantered that Lionsgate would “treat Starz just like any other third-party customer that we paid $4 billion for.”

Industry experts have pegged Lionsgate’s stake to be around $458 Million in Epix. This makes Viacom’s stake worth around $739 Million.

Currently, Epix is ranked at #4 position following leading networks like HBO, Showtime, and Starz. With the recent acquisition of Starz by Lionsgate, the company now does not need any other network. MGM Holdings has about 18.8 per cent of Epix. This puts an estimate on that of about $277.7 Million.

Epix deal further bolsters MGM’s digital and TV businesses. Recently, the company reported its 4th quarter earnings, as per which its TV content unit (including United Artists Media Group after MGM purchased the 45-percent in January in that it didn’t already possess) revenues fall 8.8 percent to $68.1 M along with a contribution of up to 117 percent to $33.9 M.

It was reported by CEO Gary Barber that the investors at MGM plan to enhance their content spending effectively this year to an amount as much as $440 M from $218 M recorded in the year 2016.

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