Liberty Global Increases ITV Stake

Cable company Liberty Global has increased its stake in ITV, leading to speculation a full takeover could be on the cards. Liberty Global has at the same time nentered into a hedging transaction with respect to the ITV shares it has acquired and obtained further financingfrom its hedge counterparty. These were the drivers for adjusted EBITA to climb 24% compared with the first half of 2014 to £400 million.

Liberty Global owns cable operator UPC which earlier this month confirmed it bought TV3 for a price of up to €87m.

Already the largest shareholder in the commercial broadcaster, the Virgin Media owner now speaks for approximately 9.9% of shares.

Mr Malone, the veteran US cable tycoon who also controls Liberty Media and Discovery in the US, has been active during the latest wave of consolidation in the industry.

ITV has been snapping up independent production companies, such as Talpa Media which makes entertainment show The Voice, to reduce its reliance on its broadcasting business in Britain. Liberty Global’s stake in ITV and the related hedging arrangements are attributed to the Liberty Global Group for purposes of its tracking stock capital structure.

“This investment remains an opportunistic one for us in our largest market”, Mike Fries, chief executive of Liberty, said today (31 July).

This comes after ITV, which has the UK versions of Got Talent and The X Factor, posted half-year pre-tax profits of £391 million (US$608.5 million), up 25%, on revenues of £1.36 billion.

Analyst Ian Whittaker at Liberum said he expected ITV’s shares to jump again on Friday.

“Liberty has stated officially it has no intention of making a bid but its move suggests it thinks a bid may be coming at some point and it wants influence”.