Comcast’s Sky unit in talks to buy ITV's broadcasting arm for GBP1.6b
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The news: UK broadcaster ITV on Friday confirmed that it is in preliminary discussions with Sky, which is owned by US media multinational Comcast, to sell its media and entertainment arm for up to GBP1.6 billion ($3.24 billion).
The numbers: The GBP1.6 billion potential sale implies a breakup value of around 112 pence per share, a 65% premium to ITV’s closing price on Thursday in London prior to news of the deal breaking.
Shares in ITV surged as much as 20% in early trading in London to as high as 81.25 pence. Shares were up almost 15% at 11:45am local time (10:45pm AEDT).
The context: ITV said on Friday that that there is no certainty about the terms of a potential transaction or whether an agreement will be reached.
The sale to Sky would include ITV’s media and entertainment division, which comprises its free-to-air channels and its ITVX streaming platform, leaving ITV with its studios unit which produces shows including Britain’s Got Talent and Love Island. Sources told Bloomberg that the remaining business could attract interest from both strategic and private equity buyers.
ITV’s studio unit currently spans 13 countries and brings in around half of the group’s revenue, with the media and entertainment division bringing in the remainder.
As the UK’s largest public broadcaster any deal would require regulatory approval.
