Hedge Funds Love These Two Companies in Merger Talks

Both the Los Angeles Times and Variety cite valuation as a hurdle to the supposed merger. After Monday’s close, Lionsgate had a market capitalization of $5.73 billion, while Wall Street valued Starz at $3.83 billion. If the deal were to push through, Lionsgate CEO Jon Feltheimer will be leading the combined firm with Starz CEO Chris Albrecht being given an “important positions,” said the Los Angeles Times. Another hurdle for the deal would be Epix, a movie channel that competes with Starz and is co-owned by Lionsgate and Viacom, Inc. (NASDAQ:VIA). If Lionsgate and Starz were to merge, Lionsgate would have to get approval from equity partners of Viacom and Starz to combine Starz with Epix. And of course, a merger between Lionsgate and Starz (NASDAQ:STRZA) would have to be approved by both firms’ boards of directors.

Based on the extensive Insider Monkey database, hedge funds were likewise bullish on Starz (NASDAQ:STRZA) in the second quarter, owning over 18% of all shares of the firm. Their investments totaled $825.89 million by the end of June, up by more than 15% on the quarter, but below the almost 30% climb of the stock in the period. There were 27 hedge funds long on the stock by the end of the second quarter, up by two compared to March-end. Ibis Capital Partners, led by David Forster and Peter Wilton, owned 551,088 Starz shares at the end of June.

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