ITV has cashed in on broadcasting peer STV’s rising share price by selling its 6.79 per cent legacy stake in the Glasgow-based firm.
Granada Media, which formed ITV in 2004 through its merger with Carlton, bought an 18.6 per cent stake in Scottish Media Group, STV’s forerunner, in 1999 from Mirror Group newspapers for £110 million.
ITV, which was STV’s fourth-largest shareholder, yesterday revealed that it had sold its remaining 2.6 million stake on Monday at 285p a share, bringing in a total of £7.5m.
STV and ITV had been locked in legal battles over STV’s refusal to show some of ITV’s programmes – including the initial series of period drama Downton Abbey – but the pair buried the hatchet last year with a fresh network agreement.
Ian Whittaker, an analyst at Liberum Capital, said: “From a strategic stand point, ITV was not going to make a bid for STV.
“The relationship between the two has improved since last year’s network agreement and so STV’s share price has climbed.
“STV was languishing at about 150p but recently peaked at 325p, so ITV may have decided to cash in on the share price rise.”
Investec Securities analyst Steve Liechti added: “Shares in STV have been going up and ITV was never going to want full control of STV.
“STV has been one of the best-performing shares in the media sector this year.”
ITV’s stake in STV was a throwback to a period of rapid consolidation in the television industry following its deregulation under the 1990s broadcasting acts.
An ITV spokesman said: “We have held these shares for a number of years and decided this was an appropriate time to take profit on our investment.”
An STV spokeswoman added that the sale reflected its good share price and was a sign of the good relationship between STV and ITV.
Shares in STV, which is led by chief executive Rob Woodward, closed down 3.1 per cent or 9.5p at 297p, while ITV ended the day 1.4p lower at 182.2p.