Potential suitors have again begun circling ITV, Britain’s largest commercial terrestrial broadcaster, after a prolonged period of share price weakness and renewed questions over its long-term strategic fate.
Sky News has learned that a number of potential bidders for part or all of the company, whose biggest shows include Love Island, have in recent weeks held preliminary discussions about joining forces to pursue a possible transaction.
TV industry sources said at the weekend that CVC Capital Partners and a major European broadcaster – likely French group TF1 – were among those who had begun exploring the merits of a possible bid.
The sources added that All3Media, owned by RedBird Capital, and Mediawan, backed by private equity giant KKR, were also on the list of potential suitors for the ITV Studios production arm.
One warned this weekend that none of the work on potential bids was at a sufficiently advanced stage to require disclosure under UK stock market disclosure rules, and suggested the board ITV’s board of directors – chaired by Andrew Cosslett – had not received any unsolicited approaches recently.
This meant that the prospects for a formal approach to materialize were very uncertain.
The person added, however, that long-serving ITV chief executive Dame Carolyn McCall had discussed with the company’s financial advisers the merits of a demerger or other form of separation of its two main business units.
Its main banking advisors are Goldman Sachs, Morgan Stanley and Robey Warshaw.
ITV shares are stagnant at just 65.5p, giving the whole company a market capitalization of £2.51 billion.
The stock rose more than 5% Friday amid vague market talk of a possible takeover bid.
Bankers and analysts believe ITV Studios, which made the hit Disney+ series Rivals, would be worth more than the market capitalization of the entire company if ITV were to break up.
People familiar with the matter said that, as part of a possible project under consideration, CVC could be interested in acquiring ITV Studios, with a European broadcast partner taking over its broadcast arm, including the ITVX streaming platform.
“At the right price, it would make sense for CVC to want to acquire an undervalued production business, while TF1 wants an English-language streaming service on ITVX, as well as the channels’ declining cash flows,” said this weekend. end a veteran of the audiovisual industry.
“But they would only get the assets in a deal worth double the current stock price.”
Speculation about the takeover of ITV, which competes with Sky News’ parent company, has been a recurring theme since the company was formed following the merger of Carlton and Granada more than 20 years ago.
ITV said this month it would seek to make a further £20 million in savings this year, while continuing to deal with the fallout from last year’s strikes by Hollywood writers and actors.
He added that revenue from the Studios arm would decline in the current financial year, with advertising revenue significantly lower in the fourth quarter compared to the same period a year earlier due to the difficult comparison with the World Cup. rugby 2023.
Allies of Dame Carolyn, who has led ITV since 2018, say she has transformed ITV, diversifying further into production and overhauling its digital capabilities.
The majority of ITV’s revenue now comes from profitable and growing areas, including ITVX and the Studios arm, they said.
By 2026, these zones should represent more than two thirds of the group’s sales.
This year, its production arm was responsible for the most-watched drama series of the year on any channel or platform, Mr. Bates vs. The Post Office.
In her third quarter update earlier this month, Dame Carolyn said the company’s “good strategic progress has continued through the first nine months of 2024, driven by strong execution and creativity from point.”
“ITV Studios is performing well despite the expected impact of the writers’ strike and a weaker market from free-to-air broadcasters.”
She said the unit would make record profits this year.
ITV and CVC declined to comment, while TF1, RedBird and Mediawan did not respond to requests for comment.