* Shares end nearly 10 pct higher on first trading day
* Starz has $1.1 bln debt, access to $450 mln more
* Starz is potential acquisition target - analyst
* Shares close nearly 10 pct higher
By Liana B. Baker
Jan 14 Starz Entertainment ended its
first day of trading nearly 10 percent higher on Monday
following Liberty Media's spin off last week of the
company known for its premium movie channels.
The shares finished up $1.39, or 9.79 percent at $15.59 a
Liberty announced in August that Starz, which runs eponymous
movie and TV channels, as well as the Encore movie channels,
would become a separate listed company.
Starz currently has about $1.1 billion of debt and access to
a $450 million bank credit facility, the company said in a
statement late on Friday.
Some board members of the company include influential music
executive, Irving Azoff, former DirecTV chief programmer Derek
Chang, CEO Christopher Albrecht, Gilt Group founder and chairman
Susan Lyne and Warner Music group chief operating officer Robert
Analysts view Starz, which competes with HBO and Showtime,
as a potential acquisition target. The Starz channel has 21
million subscribers, while Encore has 34 million. Macquarie
analyst Amy Yong estimates that HBO, the leader in premium TV
which is owned by Time Warner Inc, has 39.5 million
subscribers and that CBS-owned Showtime has 21.3
Yong said in a research note that a large media company
could help improve Starz' margins by "more extensive
distribution, producing more content hours" and by commanding
"higher rates in affiliate negotiations."
Janney analyst Tony Wible called movie channel Epix "an
ideal buyer" for Starz, also in a research note.
Greg Maffei, the CEO of Liberty Media, said at an investor
conference last week, "I don't know whether Starz gets sold,"
but he also talked about a hypothetical scenario in which
Netflix could acquire it.
Epix is a pay-TV movie channel jointly owned by Viacom Inc's
Paramount Pictures, Metro-Goldwyn-Mayer Pictures and
Lions Gate Entertainment Corp.
ISI analyst Vijay Jayant estimates Starz will generate
revenue of $1.62 billion in 2012 and in 2013. Starz receives
about 80 percent of its revenue from affiliate fees from cable
companies, Jayant said.
In December, Starz did not renew an exclusive agreement to
carry Disney's movies and Netflix Inc swooped in to
sign its own contract with Walt Disney Co. Starz has
been focusing on developing original programming such as
"Spartacus," a drama set in ancient Rome, and mob drama "Magic
City," set in Miami in 1959.
Liberty Media, the former parent company of Starz, has been
tweaking its portfolio. It is close to bringing its stake in
Sirius XM Radio Inc above 50 percent, while it has also
been increasing its investment in Live Nation Entertainment Inc