Shares of entertainment producer Lions Gate (LGF.A) rose Wednesday after a report said it was mulling a spinoff of its Starz premium channel into a separate company.
People familiar with the matter told The Wall Street Journal that a Starz spinoff would help pare debt at the Santa Monica, Calif., movie and TV studio and enable shareholders to invest separately in the business.
No decision about whether or how to separate out Starz has been made, the paper reported on Tuesday.
One method would be through a special-purpose acquisition company, a public company created specifically to acquire a business, the journal reported.
Starz produces original series including "Power" and "Outlander" as well as the "Hunger Games" movies.
One issue that Starz faces, people familiar with the matter told the Journal, is that Comcast (CMCSA) - Get Report is considering dropping the channel and its sister channel Encore when the Lions Gate-Comcast contract expires at year-end.
Shares of Lions Gate rose 3% to $9.22 on Wednesday.