MGM in talks to acquire entirety of Epix -sources

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By Jessica Toonkel and Liana B. Baker

<span class="articleLocation”>MGM Holdings Inc is in talks to acquire the 81
percent of Epix it does not already own from two of its partners
in the premium U.S. channel, Viacom Inc and Lionsgate
, people familiar with the matter said on Thursday.

The deal would give MGM, a privately held U.S. 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 percent stake in Epix to
help pay down its $12 billion debt load, the sources said.

Lionsgate has already said it is exploring options for its
close to 32 percent stake in Epix following its $4.4 billion
acquisition of pay TV network Starz Entertainment LLC.

Under the terms being discussed, Paramount and Lionsgate
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,
Lionsgate 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 U.S. 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’s media and
telecommunications conference this week that he is 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.



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