NEW YORK ( TheStreet) -- Starz (STRZA) , the perennial third-place premium channel controlled by billionaire John Malone, may finally get bought as Greg Maffei, chairman and CEO of Liberty Media (LMCA) , intimated last week and another news report speculated over the weekend.
A sale of Starz has been a source of chatter among the media press ever since Liberty Media said it would spin off the company in August 2012. The New York Post reported on Friday that both CBS (CBS) and the film studio Lions Gate Entertainment (LGF) may be involved in talks to acquire Starz, using a value of about $5 billion for the Englewood, Colo.-based television network. Starz was gaining 3% to $33.18 on Monday for a market capitalization of $3.4 billion.
If a deal for Starz is finally in the offing, Malone's decision to spin off the premium channel would have proven to be a huge success. Shares of the company have soared 223% since it began trading as a separate entity in January 2013, making it the top-performing stock among 45 recent spinoffs tracked by Bloomberg News.
Interest in Starz has been bolstered in recent weeks by the announcement that Time Warner's (TWX) HBO and CBS' Showtime plan to offer so-called Over-the-Top or standalone Internet-based services sometime next year. Starz has historically trailed both HBO and Showtime for premium payTV subscribers.
Interest in standalone options comes amid rising acceptance that consumers increasingly prefer to choose their own menu of viewing options rather than be forced to accept the 100-plus channel pay-TV bundles that cable and satellite operators have been pushing for more than two decades. The popularity of Netflix (NFLX) , which accounts for more than one-third of all Internet traffic during peak evening hours, serves as definitive proof.