Lions Gates Entertainment offered to sell cable channel Starz to CBS Corp for $5.5 billion after rebuffing a lower offer, two sources familiar with the matter said.
The counter offer was made by the film studio behind the Hunger Games movies after CBS made an informal $5 billion bid for the cable network, the sources said.
CBS’s informal offer was made by Joseph Ianniello, the interim chief executive officer of CBS, about six weeks ago and Lions Gate Entertainment sought a higher valuation, the sources said.
The approach underscores the scope of CBS’s ambitions to compete more aggressively in a world in which it is squeezed by deep-pocketed tech companies on one side and rapidly consolidating peers on the other.
The news lands 12 days before a board meeting where it will review its options that is believed to include initiating merger discussions with Viacom Inc. Both companies are controlled by National Amusements, which is owned by the Redstone family.
CBS’s approach was first reported by the Information on Friday, citing four people familiar with the situation.
Lions Gate bought Starz for $4.4 billion in a cash-and-stock deal in 2016.
CBS, home to popular shows such as the ‘The Late Show with Stephen Colbert’ and ‘The Big Bang Theory’ has been looking at the deal as a possible complement to Viacom Inc, which CBS also is considering purchasing, the report said.
While media majors Walt Disney Co and AT&T Inc are tapping into their extensive film and TV libraries to launch streaming rivals to Netflix and Amazon.com’s Prime Video, smaller players CBS and sister company Viacom Inc are focusing on providing original content to other distributors.
CBS is on track to invest more than $8 billion in programming this year, Ianniello had said.
Shares of Lions Gate rose about 12% on the report, while those of CBS were marginally down in afternoon trading.