Starz stock was up nearly 11% in after-hours trading Tuesday after a Bloomberg News report said that AMC Networks was in discussions to acquire the premium network.
According to Bloomberg , the two had talked about a merger a year ago but broke off discussions when they couldn't agree on a price. Apparently talks restarted recently, but Bloomberg added there were no guarantees a deal would be finalized.
Starz has been the subject of several deal rumors over the years – 21st Century Fox and Lionsgate were two potential suitors last year -- but hasn't been able to secure a deal. Starz’ largest individual shareholder – Liberty Media chairman John Malone – has said repeatedly that the premium network needed a “big brother” in the form of a acquirer.
Starz has struggled in the past to compete with other premium channels like Home Box Office and Showtime that are rich with original content, but has scored some recent hits like Outlander (pictured).
AMC Networks , which owns AMC (home of No.1 cable show The Walking Dead), IFC, Sundance and WeTV, is no stranger to deals. Last year it purchased international cable giant Liberty Global’s programming arm Chellomedia for $1 billion and bought a 49.9% stake in BBC America for $200 million. Liberty Global is also chaired by Malone.
Starz stock closed at $38.79 on Tuesday and rose as high as $42.97 per share (up $4.18 each or 10.8%) in after hours trading after the news broke. AMC shares, which closed at $74.14 each on Sept. 14, rose as high as $76 per share (up $1.86 each or 2.5%) in after-hours trading.