BSkyB Sells ITV Stake to Liberty Global

LONDON (The Deal) -- 21st Century Fox  (FOXA) affiliate British Sky Broadcasting Group on Thursday, July 17, said it had sold almost all of its remaining stake in ITV to John Malone's Liberty Global for £481 million ($824.2 million).

BSkyB said it sold just over 259.8 million shares, or a 6.4% ITV stake, at 185 pence per share, 0.6% more than ITV's Wednesday closing price. It plans to use the proceeds for "general corporate purposes."

The stake building by Liberty raises questions about Malone's long-term intentions towards Britain's largest commercial terrestrial TV broadcaster but Liberty on Thursday said it has no plans to make a takeover offer; under the U.K. Takeover Code that statement ties its hands for six months under most circumstances.

"This is an opportunistic and attractive investment for us in our largest cable market. ITV is the leading commercial broadcaster in the U.K. and we're excited to be shareholders," said Liberty Global CEO Mike Fries in a statement.

Liberty has previously tried to parlay minority stakes into full control and is currently negotiating with EC regulators to complete its agreed €4.9 billion ($6.7 Billion) bid for the outstanding 71.5% of Dutch cable company Ziggo.

The ITV share purchase also chimes with a quest for content among cable companies and telecom operators. In May Liberty agreed to make a joint £550 million offer for Permira-backed U.K. production company All3Media with Discovery Communications (DISCA).

Liberty said it will finance the purchase in part through a loan linked to a hedging transaction that would be secured by ITV shares. It said the transaction doesn't require regulatory approvals.


ITV shares were up 12.2 pence, or 6.6%, at 196 pence in early trading in London.

"At worst, this puts a floor on the ITV equity at current levels," said Peel Hunt analyst Alex DeGroote, who has a buy recommendation on the stock. "In reality, ITV is now in play in terms of a take-out."

The disposal leaves BSkyB will less than a 1% holding in ITV and marks the final chapter of an eight-year saga which started when BSkyB snapped up a 17.9% stake in ITV in 2006 in a move interpreted as an attempt to foil a bid by the-then NTL.

BSkyB in January 2010 lost a protracted legal battle with U.K. competition authorities to sell down its stake, while Liberty bought NTL successor-company Virgin Media last year for more than $23 billion.

The sale comes as BSkyB holds talks talks with 39% owner 21st Century Fox about buying the New York TV and film group's wholly owned Sky Italia unit and its separately listed Sky Deutschland, in which 21st Century Fox owns a 57% stake.

It also comes the day after 21st Century Fox's audacious, and so far unsuccessful, $80 billion attempt to take over Time Warner  (TWX) burst into the open.

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