MGM seeks full control of network
MGM Holdings Inc is in talks to acquire the 81% of Epix it does not already own from two of its partners in the premium US channel, Viacom Inc and Lions Gate Entertainment Corp, according to people familiar with the matter.
The deal would give MGM, a privately-held US movie studio best known for its classic film library, control of Epix and would be a boon to its TV business, as it seeks to build a stronger platform to distribute its content.
“Viacom is looking to sell its 50% stake in Epix to help pay down its $12 billion debt load,’’ the sources said.
Lions Gate has already said it is exploring options for its close to 32% stake in Epix following its $4.4 billion acquisition of pay TV network Starz Entertainment LLC.
Under the terms being discussed, Paramount and Lions Gate would continue to distribute their shows and movies through Epix for several years, according to one of the sources, cautioning that there is no certainty an agreement will be reached.
Any deal would likely value Epix, which comes with an online streaming service, between $1 billion to $2 billion, the sources added.
The sources asked not to be identified because the negotiations are confidential. Representatives for MGM, Epix, Lions Gate and Viacom declined to comment.
Famous for its library that includes James Bond, Rocky and other classic movies, MGM co-produces and distributes television shows such as Teen Wolf on MTV, Vikings on A&E and Fargo on FX. It also owns MGM-branded US channels that largely play its films and international networks.
Viacom CEO Robert Bakish, who took over as CEO late last year, is looking to turn around the media company’s business, which has underperformed due to lackluster ratings and ad revenue.
Bakish told investors at Deutsche Bank AG’s media and telecommunications conference this week that he was looking to make Viacom’s debt investment grade, and that the company will sell non-strategic assets.
Epix, whose shows include Berlin Station and Graves, has about 14 million subscribers, according to research firm SNL Kagan.
MGM has been exploring its options for some time following its emergence from bankruptcy six years ago. It is controlled by hedge funds including Anchorage Capital Partners and Highland Capital Partners.