Could ITV Be Up for Sale With CEO Departing?

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ITV

"This could potentially be a sign that ITV might be heading for a sale," says one analyst.

U.K. TV networks and production giant ITV on Wednesday announced that CEO Adam Crozier would step down midyear without immediately naming a full-time successor.

That led some company and industry watchers to wonder whether recurring chatter about possible bids by sector biggies, including U.S. companies, for ITV could now materialize. 

"It is a...rule of thumb that any company is vulnerable in the interregnum between CEOs, and this is increased for ITV given the current sterling/dollar exchange rate due to the attraction of ITV to U.S. bidders," Numis analyst Paul Richards tells THR. "So yes, I think it increases the likelihood of a bid."

Liberum Capital analyst Ian Whittaker in a report Wednesday morning similarly wrote about the CEO departure announcement: "This could potentially be a sign that ITV might be heading for a sale."

Highlighting that Ian Griffiths is being promoted from his role of ITV finance director to the combined role of COO and finance director, while chairman Peter Bazalgette will become executive chairman, adding more day-to-day management involvement to his work, Whittaker said: "This has echoes of a decade ago when Ian Griffiths was in his previous job at Emap as finance director and Emap’s then-CEO stepped down. Ian Griffiths and the chairman (Alun Cathcart) ran the company together without a CEO and were responsible for breaking up Emap and selling off its assets at a high price."

Concluded the analyst: "This is not to say history will repeat itself, but it would provide one explanation as to why ITV has not announced a new CEO...i.e. that there is a reasonable chance of a bid coming through for ITV."

John Malone's Liberty Global already owns a 9.9 percent stake in ITV, making it the first company analysts typically mention as a possible buyer. Discovery Communications, which co-owns TV production powerhouse All3Media with Liberty Global, has also been mentioned in the past, even though Discovery CEO David Zaslav has said buying ITV would be "a big bite" for the company.

"Maybe one option to consider is a joint bid by Liberty and Discovery, with whom Liberty has close links," Whittaker suggested Wednesday. "The two companies acquired jointly All3 Media in 2014, and both Liberty and Discovery have been acquiring European free-to-air broadcasters."

Crozier has repeatedly said that he sees ITV as a consolidator rather than a seller. But ITV has repeatedly been the focus of deal chatter since Liberty Global first acquired its stake. Chatter returned in early April when ITV in a regulatory filing disclosed that Goldman Sachs' stake in the company had risen above 25 percent amid a derivatives deal with Liberty Global. That sent ITV's stock up about 3.5 percent to a nine-month high as investors wondered whether Liberty Global and/or Goldman could be preparing a takeover bid. 

One finance industry source familiar with the deal told THR at the time that it was a hedging transaction that gives Liberty Global continued access to its ITV stock while assigning its stake to Goldman, at least temporarily.

ITV, Liberty Global and Discovery representatives declined to comment.

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