AMC Networks announced plans on Monday to purchase a majority stake in BET founder Robert L. Johnson’s RLJ Entertainment.
When word broke of the impending deal, shares of the publicly traded RLJ Entertainment went up 9.8%.
The entire deal values RLJ Entertainment, a publicly traded company at just $60 million, and will see AMC take over two of RLJ’s streaming properties: Acorn TV, which streams British television and film content and the Urban Movie Channel (UMC).
Last fall, AMC invested $65 million in RLJ Entertainment for a 26% stake in the form of a loan to the company. Variety is reporting that the loans increased to an aggregate of $78 million.
The agreement also included an option for AMC to later purchase a majority stake in the company and on Monday, the cable company is offering $4.25 per share in cash.
Johnson is expected to still hold a minority stake in the company pending approval from RLJ’s board. He currently owns approximately 47% of the outstanding shares of RLJ Entertainment stock.
AMC said it intends to operate RLJ as a privately-owned subsidiary without selling off its stake or influencing its day-to-day operations.
Acorn TV and the Urban Movie Channel have a combined 700,000 subscribers as of last year, up 55% from a year earlier.
Johnson made business history when he took BET public in 1991, the first time a black-owned company was traded on the New York Stock Exchange. In 2000, he sold the cable network to Viacom for $3.2 billion, making him the first African American billionaire. He acquired the Charlotte Bobcats in 2003, creating the first black-owned NBA franchise and launched four other BE 100s companies.
The Silver Spring, Maryland-based company distributes titles in multiple formats including on broadcast and pay TV, DVD, and digital platforms in North America, the U.K., and Australia. Through its U.K.-based Acorn Media Enterprises development arm, RLJE owns 64% of Agatha Christie Ltd., which manages the literary and media rights to Agatha Christie’s works around the world.