Starz, the premium cable network that counts billionaire John Malone as its biggest shareholder, surged on renewed prospects for a combination with AMC Networks Inc.
Starz, based in Douglas County, advanced 4.3 percent to $40.44 at the close in New York, putting the stock up 36 percent this year.
AMC Networks, the cable-TV company that owns shows including “The Walking Dead,” is in renewed talks to acquire Starz, people with knowledge of the matter told Bloomberg News on Tuesday.
The preliminary discussions might not result in an acquisition, according to the people, who asked not to be named because the information is private. Malone is the largest individual investor in Starz, according to company filings.
“I do think that there’s a good business rationale for different companies coming together,” said Starz Chief Executive Chris Albrecht in a CNBC interview Wednesday. “When you put two good companies together that have complementary and supplementary businesses and have good management teams and are both executing well on their own, I think that’s an opportunity.”
An AMC-Starz deal would put Malone, who has driven cable and telephone industry consolidation in the past, in the thick of the action as film and TV companies weigh mergers.
A combined AMC Networks and Starz would gain leverage in negotiating fees from pay-TV carriers, which have already paired off to lower costs as customers defect to online players like Netflix Inc.
Starz, which owns the Starz and Encore premium movie channels, couldn’t come to terms last year with potential buyers, including New York-based AMC Networks, because of differences over valuation, people with knowledge of the matter said last December.
Starz’s enterprise value has increased since then to more than $5 billion from about $4 billion, partly on speculation that Lions Gate Entertainment Corp. may buy the company.
AMC Networks closed little changed at $74.13. Lions Gate rose 2 percent to $39.27.
