The buzz about a potential deal uniting Lionsgate with Starz is growing louder.

Shares in the premium network company shot up on Thursday after The Street reported that the on-again/off-again talks were back on. They’ve retreated since then as the market responded to the startling news of the UK’s vote to leave the European Union: Starz is down 2% today, while Lionsgate is down 3.6%.

But Wunderlich Securities’ Matthew Harrigan says today that he can envision a deal paying $30 a share for Starz, a small premium above its $28.71 closing price on Friday.

Although he covers Lionsgate, not Starz, he says that the premium networks company’s “risks arising from the loss of Disney film product, dependence on Sony Pictures, and uncertain original programming development while competing with Netflix, Amazon Prime, etc. appear considerable.”

John Malone
Associated Press

A deal would appeal to Starz’s controlling shareholder, Liberty Media Chairman John Malone, who also owns 3.4% of Lionsgate and sits on its board.

Since Lionsgate is incorporated in Canada, the famously tax-conscious mogul might be able to craft a deal that cuts Starz’s tax rate by 20%, the analyst says.

The studio would be taking a risk if Starz falls short of investor expectations. But he also envisions an “aggressive upside scenario” beginning in 2019 if “Liongate’s TV production expertise favorably [alters] Starz’s original programming potential with fully owned, internally-produced product.”

The companies have made no secret of their interest in each other. Starz said in an SEC filing in February that Lionsgate “intends to explore whether there is a potential mutually beneficial combination of the two companies.”

Lionsgate’s negotiations with Starz quickly ran aground when the studio released an earnings report for the last three months of 2015 that fell far short of Wall Street’s expectations, due in part to disappointing results for The Hunger Games: Mockingjay, Part 2.

Early this month Starz CEO Chris Albrecht told an investor gathering that while he wouldn’t “predict any particular occurrence” he expected to see “more activity in the M&A space.”