Liberty ups ITV stake as rumours mount of full takeover
Cable company Liberty Global has increased its stake in ITV, leading to speculation a full takeover could be on the cards.
Liberty – which owns Virgin Media – upped its stake to 9.9 per cent having last September bought BSkyB's 6.4 per cent stake in ITV for £481m.
The company has been on a buying spree in Europe over the past 10 years, namely on cable assets, but more recently has focused its attentions on acquiring stakes in content producers.
The move to own content would give Liberty rights to shows such as Coronation Street, Mr Selfridge and Downton Abbey which it could then use within its own pay-TV packages.
Rumours of a full takeover have circulated since it bought BskyB’s stake. Bloomberg suggested at the time that the strategy mirrors that of earlier deals made by Liberty owner John Malone to gradually build stakes in cable companies before seeking takeovers.
However Liberty has repeatedly denied that it plans to acquire the broadcaster.
“This investment remains an opportunistic one for us in our largest market,” Mike Fries, chief executive of Liberty, said today (31 July).
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Another theory is that by increasing its stake, Liberty could dissuade other potential bidders despite not yet having the right to appoint directors to the ITV board.
Ian Whittaker, a bullish analyst at Liberum, told the Financial Times: “The interesting question is why now? 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.”
ITV has been steadily buying production companies – as it looks to rely less on advertising revenue – which has helped increase its market capitalisation over the past five years from £2bn to £10bn.