Lionsgate and Starz in merger talks

Movie and television studio Lionsgate is reportedly in advanced talks to merge with the movie channel Starz, a deal that would further cement the studio's standing as a major Hollywood player.

The Los Angeles Times, citing unnamed sources, said Monday that high-level talks between the two companies have been ongoing for months.

But it added that a deal may not materialize and that other scenarios were under consideration, including a variety of partnerships.

"One of the factors complicating the dealmaking is the valuations of the two companies," the Times said.

"Wall Street places Lionsgate's worth at $5.7 billion, while Starz has a valuation of $4 billion."

A Lionsgate spokesperson reached by AFP declined to comment on the possible deal. Starz officials could not be immediately reached for comment.

A merger would mark another step in Lionsgate's evolution from being a lightweight entertainment company to a major industry player.

The company, based in Santa Monica, California, has made a number of shrewd acquisitions over the years, including the rights to the blockbuster "Hunger Games" film series.

The premium pay-TV network Starz is owned by billionaire John Malone. A merger with Lionsgate would open up wide programming possibilities for the company.

Starz stocks went up 10 percent to $43 in Monday's after-hours session while Lionsgate shares went up nearly eight percent to $42.19.