Lions Gate Entertainment Corp. investors, betting that Amazon.com Inc. could be an acquirer of the film and TV studio, have made it an increasingly expensive target.

The company’s market value has risen by more than US$400 million in the last three trading sessions, fueled by takeover speculation. The shares rose 3.8 per ent on Tuesday, extending a more than 9 per cent gain since Bloomberg reported last week that a top investor sees Amazon as a possible suitor.

The company could ultimately fetch at least a 30 per cent premium in a deal scenario, Bloomberg Intelligence analyst Robert Schiffman said.

But with Amazon’s market valuation at close to US$1 trillion -- and ample cash -- investors aren’t likely to be miffed by the e-commerce giant doing a deal.

“Utilizing cash balances to diversify operations, ensure a library of original content and ultimately drive enhanced free cash flow could be considered ‘free’ relative to using the cash for shareholder returns,” Schiffman said.

Amazon “maintains considerable financial flexibility” to fund mergers and acquisitions, he said.

Lions Gate may not come cheap, but it’s one of the few Hollywood studios that’s not part of a larger conglomerate. It’s also already working with Amazon to expand its Starz network internationally on the Prime Video service.