ITV PLC (LSE:ITV) shares soared 18% to 80p after the FTSE 100 group confirmed that it is in preliminary talks about potentially selling its broadcast television business to Sky.
It said the discussions are currently about a possible offer at an enterprise value of £1.6 billion for its Media & Entertainment business, which includes online streaming service ITVX.
The company put out the statement following a report in the Financial Times.
There can be no certainty as to the terms upon which any potential sale may be agreed or whether any transaction will take place," the company said, promising further announcements when appropriate.
British satellite broadcaster Sky PLC was acquired by Comcast Corporation (NASDAQ:CMCSA) for £30 billion in October 2018, following what was described as one of the most protracted takeover sagas in recent history, buying the major stake held by Rupert Murdoch's Fox.
And last month, longtime ITV shareholder Liberty Global (NASDAQ:LBTYA) decided to offload half its stake, having held it for just over a decade.
Last November, reports suggested that several media and finance groups were weighing up potential bids for part or all of the company.
CVC Capital Partners, RedBird Capital-owned All3Media, Mediawan and a major French broadcaster, thought to be Groupe TF1, were among firms said to be circling, though it was reported that the broadcaster had not been approached formally at the time.
All3Media and Mediawan were thought to be eyeing an offer for the ITV Studios production arm, while CVC was said to be looking at teaming up with a European partner to split the group in two.
France's Banijay Group also considered a bid for ITV or its studio arm this spring.
In quarterly results earlier this week, ITV said it had identified £35 million of additional temporary savings in the Media & Entertainment division to "align our M&E cost base (particularly content and discretionary spend) with the softer advertising demand we are seeing in Q4".
Shares in the broadcaster and producer fell to a seven-month low on Thursday, after the results, though had been on a grinding climb higher over the past three years, after falling to a decade's low in 2022.
** UPDATE: Adds details, including share price **