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Liberty Global Acquires ITV Stake From BSkyB for $824 Mln

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Cable billionaire John Malone took another step to expand in TV programs and production with the purchase of a stake in ITV Plc (ITV), the biggest U.K. commercial broadcaster known for its top-rated show “Downton Abbey.”

Malone’s Liberty Global Plc (LBTYA) acquired 6.4 percent of London-based ITV from British Sky Broadcasting Group Plc (BSY) for 481 million pounds ($824 million), paying 185 pence a share. ITV jumped as much as 9.4 percent in London. Liberty Global said it doesn’t plan to make a full takeover bid for now.

The purchase gives Liberty Global, owner of U.K. cable operator Virgin Media, a stake in a network of free-to-air channels including ITV, ITV1 and ITV Family, with top-rated shows such as “X Factor.” Malone has been investing in TV content in recent months and in May agreed to buy production house All3Media, in a partnership with Discovery Communications Inc. (DISCA), for almost $1 billion. Malone has 29 percent voting rights in Discovery.

“It is hard to see how this will not be looked at as anything other than Liberty planting a flag in the ground for a potential acquisition at some point” of ITV. Liberum Capital analyst Ian Whittaker said in a note.

Sky Europe

Under U.K. takeover rules, Liberty Global must now wait six months if it intends to make a full bid for ITV. Those rules can be waived if there’s a major change in ITV’s business or if the board consents to merger talks.

ITV competes with Channel 5, which was sold in May toViacom Inc. (VIAB) The company’s shares have more than quadrupled in the past five years and has long been the subject of takeover speculation. The broadcaster is reducing its dependence on advertising by investing in content and by acquiring production assets under Chief Executive Officer Adam Crozier, the former head of Royal Mail Group Plc who took over in 2010.

Today’s deal will give BSkyB cash to help finance its planned acquisition of pay-TV assets. The company, which is 39 percent owned by Twenty-First Century Fox Inc. is in talks to buy Fox’s Italian and German units. A transaction could be valued at about 10 billion euros ($13.5 billion), people familiar with the matter said in May.

Liberty Global said today the ITV investment doesn’t require regulatory approvals. It will be financed through a loan linked to a hedging transaction that’s secured by ITV shares and existing liquidity, it said.

Article Credit: Bloomberg

Updated 4 Years ago

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Tags:     John Malone     ITV Plc     LBTYA     U.K     DISCA     Adam Crozier     BSkyB