The widely expected merger between Lionsgate and Starz has been derailed because of the Brexit currency chaos, The Post has learned.
One of the banks being lined up to provide the financing was forced to withdraw from the deal after the British pound fell about 10 percent versus the dollar over two days, one source told The Post.
“It fell apart over the weekend,” the source said. “Brexit hurt the financing. It’s dead.”
The person cautioned that the deal could be resuscitated if economic conditions improve.
Rumors of a likely deal between the Hollywood studio and the premium pay-TV channel gained steam in the last couple of weeks — pushing shares of both companies higher.
Shares of Lionsgate, the studio behind “Hunger Games” and “Divergent,” rose 5.8 percent on June 23, to $21.72, as whispers of an impending deal raced from Tinseltown to Wall Street.
On the same day, Starz shares gained 5.5 percent, to $29.33.
Brexit, the vote by Britons to leave the European Union, has cast a cloud of uncertainty over the British pound, as the UK will have to rework treaties and tariffs with the EU.
The pound hit a 31-year low on June 27 versus the dollar.
Lionsgate owners include Liberty’s John Malone, who also controls Starz.
Starz has been searching for a partnership for some time and has piqued the interest of CBS and AMC Networks, among others, although neither of those lodged a bid for the firm in the latest round of talks.
Telecom giant AT&T, which owns DirecTV, has been keeping a close eye on the process, too, but it hasn’t made a bid yet, another source said.
AT&T’s name has cropped up recently in media M&A circles, as it is also eyeing a Yahoo bid.
The expected Lionsgate-Starz merger isn’t the first time the two companies attempted a hookup.
The two were hoping to execute a deal in February, but Lionsgate’s poor quarterly results and the lackluster showing of “The Hunger Games: Mockingjay Part 2” sank its stock price and the plan was scuppered.
Lionsgate and Starz have much to gain from a get-together — both stocks are off significantly year-to-date and are trading near their respective 52-week lows.
Lionsgate stock is down 37.9 percent year-to-date. Its shares closed Tuesday at $20.11.
Starz has slipped 17.9 percent year-to-date. It closed Tuesday at $27.52.
Lionsgate and Starz did not comment.
