Although US cable television giant Liberty Global, which bought Virgin last year in a $23.3 billion (£13.6bn) deal, insisted it had no plans to make an offer for the rest of the group, analysts said ITV was likely to attract interest from other potential bidders.
Led by chief executive Adam Crozier – the Scots-born former boss of Royal Mail – ITV is four years into a five-year turnaround plan, which has seen it boost its production arm in a bid to become less reliant on advertising revenue.
Satellite broadcaster BSkyB, which is 39 per cent owned by Rupert Murdoch’s 21st Century Fox, sold its stake to Liberty today, leaving it with a holding of just 0.8 per cent.
A spokesman said the £481 million proceeds would be used for “general corporate purposes”, but analysts said the deal could indicate it is looking to raise cash to push ahead with expansion plans after it opened talks this year to buy Murdoch’s Sky Italia and Sky Deutschland.
The stake sale brings an end to one of the most controversial corporate moves seen in the British media sector – the decision by James Murdoch, then BSkyB boss, to buy 17.9 per cent of the then struggling ITV. That move was aimed at blocking rival NTL – which later became Virgin Media – from creating a larger, more powerful competitor.
BSkyB originally spent £940m on the ITV stake in November 2006, snapping up the shares at 135p each. It suffered a near £350m hit in 2010 when it sold a 10.4 per cent stake at 48.5p each after a decision by the Court of Appeal upheld a UK government ruling that it must sell down its stake.
Liberty, headed by Colorado-based billionaire John Malone – one of Murdoch’s fiercest rivals – broke into the UK market last year with its takeover of Virgin. At the time of the deal, the group vowed to become a “disruptive challenger” in the pay television sector.
Chief executive Mike Fries said today: “This is an opportunistic and attractive investment for us in our largest cable market. ITV is the leading commercial broadcaster in the UK and we’re excited to be shareholders.”
Fries said that Liberty “does not intend to make an offer to acquire ITV”, so under City takeover rules the group will be blocked from making an approach within the next six months unless a rival bidder emerges.
Ian Whittaker, an analyst at Liberum Capital, said: “We would not expect an immediate bid by Liberty for ITV.
“However, it is hard to read this move as anything other than an indication of its longer-term intentions. At the very least, it sends a signal to other potentially interested parties that they would face a possible fight for the asset.”
The prospect of a tussle for control of ITV saw its shares soar 11.3p, or 6.2 per cent, to close at 195.1p today.
Garry White, chief investment commentator at Charles Stanley, said: “Investors should never buy on bid hopes alone, the old City saying goes.
“But the interest by Liberty implies that ITV’s strategy is being keenly watched by global media players.”