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The Wall Street Journal: Roku and Apollo Global team up to bid for minority stake in cable channel Starz

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Roku Inc.
ROKU,
+1.07%

 has teamed with private-equity firm Apollo Global Management Inc.
APO,
+0.65%

 to bid for a minority stake in the pay-TV and streaming service Starz, which is known for series like “Outlander” and “Power,” according to people familiar with the situation.

In November, movie and television production company Lions Gate said it was considering selling or spinning off Starz. Lions Gate acquired Starz for $4.4 billion in 2016, but has struggled to fulfill the promise of the deal, with the combined company now valued at around $3 billion.

Roku, known for its set-top boxes that power streaming apps, has been stepping up investments in original programming. Lions Gate and Roku recently announced a deal that would see the studio’s films run exclusively on the free, ad-supported Roku Channel, after being aired on Starz.

Roku last fall announced plans to develop more than 50 original shows over the next two years for its Roku Channel, which is ad-supported. In December, Roku released its first original movie, “Zoey’s Extraordinary Christmas,” a spinoff of NBC series “Zoey’s Extraordinary Playlist,” which was produced in partnership with Lions Gate.

Selling a stake in Starz would help Lions Gate raise cash and place a value on the premium channel, the people familiar with the situation said. Roku and Apollo could acquire up to a 20% stake in Starz, but the tandem doesn’t agree on valuation with Lions Gate
LGF.B,
+2.10%
,
one of the people said.

An expanded version of this story appears on WSJ.com.

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