Liberty Global ups stake in ITV

Liberty Global CEO Mike Fries

Cable giant Liberty Global has upped its stake in ITV, but has ruled out making an offer to acquire the UK broadcaster.

Liberty has acquired 138.7 million ITV shares, taking its overall number to 398.5 million – or 9.9%. Last year it paid £481 million (€685 million) for a 6.4% stake.

Industry commentators have long suspected Liberty of harbouring desires to buy the London-based broadcaster, and today’s deal means it reinforces its position as ITV’s largest shareholder.

However, John Malone’s firm today specifically noted it did not “intend to make an offer to acquire ITV”.

This comes after ITV, which has the UK versions of Got Talent and The X Factor, posted half-year pre-tax profits of £391 million, up 25%, on revenues of £1.36 billion.

The broadcaster has itself been in acquisitive mode this year, buying Talpa Media, Mammoth Screen and TwoFour Group, while its production and distribution arm, ITV Studios, has been in good form by delivering £496 million in half-year revenues.

Liberty added today it has entered into a hedging transaction, which limits investment risk through derivatives such as options, for the new ITV shares and obtained further financing from its hedge counterparty.

The new shares, combined with an amendment to an existing hedging transaction, results in net cash being released to Liberty Global.

“Given ITV’s operating and stock price performance, we were able to increase our stake to 9.9% with no incremental investment by hedging our existing equity position,” said Liberty CEO Mike Fries (pictured). This investment remains an opportunistic one for us in our largest market. ITV is a well-run company with attractive growth potential, and we are pleased to increase our position as their largest shareholder.”

Liberty’s assets include ownership of pay TV operators Virgin Media, Ziggo, Unitymedia, Telenet and UPC, and a 50% stake in UK-based production giant All3Media.