Lionsgate is in discussions to acquire some or all of STX Entertainment, the seven-year-old company founded by veteran producer Robert Simonds, insiders familiar with the matter told Variety. It’s an 11th hour wrinkle in the studio’s planned sale to a private equity player.

Talks began late last year, according to sources, after STX had secured a buyer in The Najafi Companies, an investment firm run by Jahm Najafi, the vice chairman of the Phoenix Suns. In addition to Lionsgate, several other players are said to be bidding on STX though it’s unclear which suitor is in the lead (or if any substantially exceed Najafi’s offer).

A Lionsgate spokesperson declined to comment on the matter. An STX spokesperson had no comment.

At the end of 2021, STX was up against a wall to secure an outright buyer after attempting to sell off its film library — which includes titles like Jennifer Lopez’s “Hustlers,” Gerard Butler’s “Greenland” and the “Bad Moms” franchise — racing against the clock while shouldering some $148 million in debt. Najafi pledged an all-stock deal on Dec. 7, though it included a “go-shop” period of 45 days. This allowed STX to seek maximum value in another buyer with a $4.5 million kill fee, should they break the agreement. Najafi’s deal was valued at $173 million, the bulk of which comprised of its assumption of all of STX’s debt.

While Lionsgate has interest in the company, other sources familiar with the negotiations described Najafi as eager to ensure that it didn’t lose out in its bid for control of the studio and “hesitant to get out of the way,” according to a knowledgable insider.

STX is only days away from a February deadline to pay its creditors. Lionsgate would benefit from the STX library, insiders speculated, as the studio continues to chart a growth course after being the subject of larger M&A conversations in the entertainment sector for years. In November, Lionsgate publicly announced it was exploring selling its premium cable and streaming service Starz.

All of this is taking place at a time of frenzied deal-making in Hollywood as major players like Discovery and WarnerMedia are combining and smaller content companies such as Reese Witherspoon’s Hello Sunshine and Will Smith and Jada Pinkett Smith’s Westbrook are getting rolled up and acquired by investment firms. The streaming wars are creating an insatiable need for films and television shows while also taking a bite out of the theatrical marketplace that STX had once hoped to crack with thrillers, comedies and other genres that major studios had largely abandoned.

The sales talks come some 18 months after STX merged with Indian media conglomerate Eros International, a short-lived union whose stock was in danger of delisting thanks to its share price. STX had previously tried and abandoned an effort to go public on the Hong Kong stock exchange in 2018, due to unfavorable market conditions. In 2020, it merged with Eros, an Indian media company.

Seven years ago, Simmonds introduced STX to a Hollywood that was in the nascent stages of its digital transformation. The company promised to be the champion and defender of the mid-budget theatrical movie, but only managed to field a few breakout hits.

In addition to the awards player “Hustlers” and the VOD hit “Greenland,” STX fared well over the course of the pandemic by offloading its content to streamers — including  the Kristen Bell comedy “Queenpins,” which went to Paramount Plus at a reported $10 million-plus profit. They continue to develop features, including an upcoming action film with Will Smith and David Leitch. Other STX releases include “Free State of Jones,” “The Gift” and the Oscar-nominated “Molly’s Game.”