Liberty Global Buys Stake in U.K.'s ITV for $825 Million

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Liberty Global CEO Mike Fries calls the deal "an opportunistic and attractive investment."

UPDATED: John Malone's company acquires the 6.4 percent stake from U.K. pay TV giant BSkyB, in which Rupert Murdoch's 21st Century Fox owns 39 percent.

LONDON – John Malone's international cable operator Liberty Global said on Thursday that it has agreed to acquire a 6.4 percent stake in U.K. broadcaster ITV, home of Downton Abbey, The X Factor and other hit shows, from pay TV giant British Sky Broadcasting.

The price tag is approximately $825 million (GBP 481 million). Rupert Murdoch's 21st Century Fox owns 39 percent of BSkyB, which will retain a minimal stake in ITV.

"This is an opportunistic and attractive investment for us in our largest cable market," said Mike Fries, Liberty Global. "ITV is the leading commercial broadcaster in the U.K., and we're excited to be shareholders."

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Liberty Global last year acquired Virgin Media, the largest cable operator in Britain. It has been looking for content deals since selling its networks unit Chellomedia to AMC Networks for about $1 billion.

Liberty Global recently partnered with Discovery Communications to jointly acquire independent U.K. production company All3media for $930 million.

Analysts had previously suggested that BSkyB could sell its ITV stake to raise money for a possible deal that would combine BSkyB with Sky Italia and Sky Deutschland, Fox's two other European pay TV platforms.

ITV's stock jumped in early London trading. It was up 7.4 percent at $3.38 (1.974 pounds) as of 10:05 a.m. London time.

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Liberty Global said it would finance the ITV deal through a combination of a loan and existing liquidity. "With this level of investment, no regulatory approvals are required" in Britain, it said.

The company also said that it "does not intend to make an offer to acquire ITV" outright. But it still reserved the right to announce a possible offer within the next six months.

An ITV spokesperson said: "We note Liberty Global’s announcement, and we will work with them as with any other shareholder as we continue our strategy of growing ITV."

BSkyB originally acquired a 17.9 percent stake in ITV in 2006. U.K. cable operator NTL, which evolved into Virgin Media, at the time was also considered a possible suitor.

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British regulators later forced BSkyB to cut down its stake in ITV to below 7.5 percent amid competition concerns. The company lost a legal battle against the decision and sold the majority of its stake in 2010 at a loss. 

Email: Georg.Szalai@THR.com
Twitter: @georgszalai

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