Liberty Global acquires 6.4 per cent stake in ITV
17 Jul 2014
Liberty Global has acquired a 6.4-per cent stake in ITV from BSkyB, pushing up shares in the UK's biggest free-to-air commercial broadcaster as it looked for a wider bid, Reuters reported.
Liberty, which acquired Virgin Media in the UK as part of a European expansion last year, said it did not intend to make an offer for the rest of ITV, but shares in the group rose 9 per cent at with the open offer.
The sale price of £481 million indicates that BSkyB is looking to raise cash to push ahead with its own expansion plans after opening talks this year to buy Rupert Murdoch's Sky Italia and Sky Deutschland, commentators say.
The ITV move comes as the latest in a string of deals in the global media sector motivated by a desire to own content, according to commentators. Liberty recently teamed up with Discovery Communications for acquisition of TV producer All3Media and Murdoch's 21st Century Fox was eyeing Time Warner.
Reuters quoted Liberum analyst Ian Whittaker as saying it was hard to see how this would not be looked at as anything other than Liberty planting a flag in the ground for a potential acquisition at some point.
He added, Liberty's Virgin Media wanted to buy ITV nearly a decade ago and the rationale for a deal then such as access to content, help to support the Virgin brand, expand customers, and financial engineering still existed now.
BSkyB had acquired its 17.9-per cent stake in ITV in 2006 for £940 million to frustrate a planned 122 pence-a-share bid for ITV by NTL, which now goes by the name, Virgin Media, The Telegraph newspaper reported.
However, the competition regulator forced it to cut the stake to below 7.5 per cent due to its influence over ITV.
The sale, today by Sky consists of 259,820,065 ITV shares at 185p per share. According to BSkyB, which was making a push to create and control 'Sky Europe', it intended to use the proceeds for "general corporate purposes".
Liberty Global bought Virgin Media last year and was looking to expand, but it was not clear what it planned to do with the ITV stake. Analysts believe Tom Mockridge, a former board member of BSkyB who now headed Virgin Media, was behind the deal.
According to Westhouse Securities analyst Roddy Davidson, from an ITV perspective the acquisition was viewed as a positive development in highlighting the group's strategic value, creating the possibility of collaboration on content and distribution and providing an additional conduit to the key US market.
