Lionsgate is leaning toward spinning off Starz’s studio division rather than its cable and streaming division, according to people familiar with the matter.

This marks a shift in strategy for the media and entertainment company, which said in May that it plans to complete the spin or sale of Starz by the end of the summer. The company is in talks to sell it to potential buyers, including the most recent Vivendi-owned Canal+, said the people, who asked not to be identified. No agreement has been reached, the person said.

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Lionsgate is in talks with several potential partners about selling stakes in the studio business, people familiar with the matter said. Those talks are likely to reach a satisfactory deal sooner for Lionsgate, as the stakes are higher than for Stars, according to people familiar with the matter. Studio Business produces movies and TV series and includes a library of over 17,000 titles, including The Hunger Games, The Expendables, and Mad Men.

Lionsgate is expected to formally announce its new plans as early as Wednesday. A Lionsgate spokeswoman declined to comment.

Selling a stake in the studio to a private equity firm or strategic firm will set a valuation floor for the business to trade on its own. It will also provide a capital shock to Lionsgate, whose stock has plummeted in recent years. Lionsgate’s market valuation is around $1.8 billion, down from around $7 billion in early 2018.

Longer term, Lionsgate is interested in selling both the studio and Starz, a source said. The company competes with larger organizations such as Netflix, Disney, Amazon, Apple and Comcast’s NBCUniversal in TV and film production. Lionsgate management hopes the studio spin-off and Starz separation will be the first step toward facilitating the sale of both units and maximizing value for shareholders, sources said. rice field.

“We are not going to make any ridiculous deals on one or both sides of the business,” Lionsgate Vice Chairman Michael Burns said at the Bank of America Media and Entertainment Conference last month. I think I am satisfied with

Lionsgate is also planning to rebrand Starzplay, the company’s international streaming service, to Lionsgate+, the people said. The rebranding will take place in 35 countries across Europe, Latin America and Asia Pacific, including the UK, France, Germany, Australia and Japan, one of the people said.

Starz’ streaming service will maintain the Starz brand in the United States and Canada, officials said. Starz is in 63 countries and last quarter he had 26.3 million global streaming subscribers.

Rebranding Starz to Lionsgate+ maintains the connection between Lionsgate and Starz even as they are separated.

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.