Roku partners with Apollo Global to buy Starz

The two companies are seeking a way to secure a 20% stake in the premium cable brand, which was acquired by Lionsgate in 2016 for $4.4 billion. 

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Roku has partnered with private equity company Apollo Global Management to make a joint bid for a piece of Starz. The first round of bids was carried out several weeks ago, and DirecTV also revealed interest in Starz. Lionsgate now has a market capitalization of only around $3 billion and is said to be looking for ways to unlock the asset value in its Starz. The two companies hope to secure as much as a 20% stake in the premium cable brand, which was acquired by Lionsgate in 2016 for $4.4 billion. Roku hopes to benefit from the acquisition by boosting its content offerings, which are supported by ad sales and subscriptions via the platform.

Lionsgate bought Starz for $4.4 billion cash and stock deal in 2016; the company’s market cap is now around $3 billion. Lionsgate announced in November that its board had approved looking at spinning off or selling Starz. News about Roku and Apollo bidding for a stake in Starz was first reported by the Wall Street Journal. It’s unknown what percentage of Starz is on the table. The Journal reported that Roku and Apollo could acquire “up to a 20% stake in Starz” but that the companies have disagreed with Lionsgate on the value of the stake.

In the fourth quarter of 2021, the Roku Channel reached approximately 80 million viewers and was one of the most-watched channels on the platform. Lionsgate acquired Starz for $4.4 billion cash and stock deal in 2016 and confirmed its board's plans to consider spinning or selling Starz. The company's original series include thriller “Power” and spinoffs including “Power Book II: Ghost,” as well as “Outlander,” “Hightown” and “P-Valley.” According to Lionsgate, Starz’s global streaming subscribers hit 19.7 million as of the end of 2021, up 1.7 million sequentially and up 44% year over year, while Starz lost a net 1.7 million linear TV subs in 2021 (down 13% year over year) to stand at 11.7 million.

 

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