Photograph by Mario Anzuoni — Reuters
By Reuters
January 26, 2017

Lionsgate has initiated talks to sell its stake in Epix to the premium U.S. cable channel’s other two shareholders, MGM Holdings and Paramount, a unit of Viacom, according to people familiar with the matter.

The move follows Lionsgate’s announcement that it would explore its options for its Epix stake following its $4.4 billion acquisition last month of pay TV network Starz (strza).

Any deal would likely value Epix, which comes with an online streaming service, somewhere between $1 billion and $2 billion, the people said this week. The outcome could be that MGM (mgmb) and Viacom (viab) become 50-50 partners in Epix, the people added, cautioning that no deal was certain.

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The sources asked not to be identified because the negotiations are confidential. MGM declined to comment. Viacom could not be reached for comment. Spokesmen for both Lionsgate and Epix declined to comment.

Currently Viacom and its studio unit, Paramount Pictures, own about 50% of Epix, while Lionsgate owns less than 32%, and MGM has about 19%, according to filings.

Epix, whose shows include “Berlin Station” and “Graves,” has about 14 million subscribers, according to SNL Kagan. It is available in over 50 million homes. Starz owns a pair of premium cable channels and a streaming service.

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Months after Bob Bakish, who previously ran Viacom’s international division, became chief executive officer, the company is looking to become a 50-50 partner in Epix.

Bakish succeeded Philippe Dauman, who tried to sell Viacom’s stake in Paramount, setting off a courtroom battle with Viacom’s controlling shareholders Sumner and Shari Redstone. Dauman resigned last August.

Following that battle, the Redstones pushed for Viacom to merge with CBS Corp, which they also control, but abandoned those efforts late last year.

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MGM, which owns a film library, has been exploring its options for some time following its emergence from bankruptcy six years ago. It is controlled by hedge funds including Anchorage Capital Partners and Highland Capital Partners.

Lionsgate CEO Jon Feltheimer, asked at an investor day this month if Epix was for sale, said the business is “a valuable asset” and was “throwing off cash,” but added that Lionsgate, Viacom and MGM would “realize the value whichever way we all decide is best for our companies.”

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