ITV has told the market it is in preliminary talks to sell its broadcasting arm to the parent company of Sky in a £1.6bn deal, sending shares soaring by almost 20%.
Comcast, the US telecom company that owns NBCUniversal, hopes to snap up ITV’s media and entertainment operations, which include its free-to-air TV channels in the UK and ITVX streaming platform.
However, the deal does not involve the programme-making arm ITV Studios, one of the world’s biggest production companies. The division, which has made shows including Love Island, I’m a Celebrity and the hit drama Mr Bates vs the Post Office, has been the subject of separate takeover talks.
ITV said there could “be no certainty” about the terms of a potential sale, or whether the sale would even take place.
The comments sent ITV’s share price climbing by 18% to 80.9p on Friday morning, meaning its shares are up almost 9% year-to-date. It is the top riser on the FTSE 250 index, lifting the company’s total value to about £3bn, up from just over £2.5bn on Thursday night.
However, the combination of the TV ad sales operations of ITV and Sky could prompt competition concerns, giving Comcast potential control of more than 70% of the UK market.
Industry sources have said Sky may have to look at remedies, including relinquishing its third-party sales deals, which include representing ad sales for Channel 5 and Disney in the UK. That may require the competitions regulator to reconsider how it measures the ad market to include digital advertising.
“There can be no certainty as to the terms upon which any potential sale may be agreed or whether any transaction will take place,” ITV said in a statement to the market on Friday. “A further announcement will be made in due course, if appropriate.”
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ITV announced on Thursday that it would temporarily cut £35m from its budgets – including by delaying some shows into 2026 and reducing marketing spending – amid the challenging macroeconomic environment and advertiser uncertainty in the run-up to the budget this month.
The company said it expected advertising revenues, which still account for most of its income, to fall by 9% in the crucial fourth-quarter advertising period in the lead-up to Christmas.
