Goldman Sachs Disclosure Reignites ITV Deal Talk

Adam Crozier, CEO ITP

A hedging deal for the 9.9 percent in the U.K. TV giant held by John Malone's Liberty Global sets off the latest debate about a possible takeover.

ITV and John Malone's Liberty Global, which owns a 9.9 percent stake in the U.K. TV giant, over the weekend and on Monday were the focus of the latest deal speculation following a late Friday regulatory filing.

In the filing, ITV 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 at the end of the trading week as investors wondered whether Liberty Global and/or Goldman could be preparing a takeover bid. ITV has repeatedly been the focus of deal chatter since Liberty Global first acquired its stake, and the fact that the filing came out on a Friday led investors to revisit possible scenarios. 

Liberty Global and ITV didn't comment on the deal. One finance industry source familiar with the deal said though it was a hedging transaction that gives Liberty Global continued access to its ITV stock while assigning its stake to Goldman, at least temporarily. It was not immediately clear if the investment bank held the remainder of its reported stake in ITV directly or for other clients.

"Having spoken with ITV, it is saying that this is not Liberty increasing its stake, but more to do with the way that Liberty holds its ITV stake with Goldman and related to Liberty loaning out some stock to Goldman," Liberum Capital analyst Ian Whittaker wrote Monday in a report.

ITV's stock declined about 2.5 percent on Monday as investors seemed to concur that no immediate takeover bid was in the works.

ITV CEO Adam Crozier has repeatedly said that he sees ITV as a consolidator rather than a seller. But Whittaker said ITV deal chatter was likely to return in the future.

"The news last week is likely to fuel speculation that Liberty may be preparing a bid for ITV," he said. "Liberty Global’s recent comments have indicated that it is interested in expanding its exposure to TV advertising and it has bought free-to-air TV assets in Belgium and the Republic of Ireland. The latter exposure is particularly interesting given the obvious similarities between the U.K. and the Republic of Ireland both in the free-to-air market and also with regards to Liberty’s position as the major pay TV operator in both countries."