ITV (LON:ITV) advanced around 7% in early deals after a significant portion of its shares changed hands between rival pay-TV firms.
BSkyB (LON:BSY) confirmed reports that it has sold the last of its shareholding in ITV to Virgin Media owner and US cable firm Liberty Global. Liberty paid £481mln for the 6.4% stake, buying 259.8mln shares at a price of 185p each.
Liberty does not intend to buy-out the rest of ITV, analysts say, though amid heightened merger and acquisition activity generally across the market, today’s transaction has sparked notable speculation that an offer may come in the future.
“Today’s news adds to the strong flow of M&A and deal activity that is sweeping global markets and despite equity indices in many cases being near their highs,” said Mike van Dulken, head of research at Accendo Markets.
“While Liberty Global says this is purely an ‘opportunistic investment’ and it is not planning to make an offer for the whole company, and shares are now off their early reaction highs of the day, subsequent speculation of a forthcoming bid could well help [ITV] shares back to near recent all-time highs of 211p.”
Through a series of European acquisitions in 2013, including the US$24bn purchase of Virgin Media, Liberty became the world’s largest cable TV and telecoms company, serving around 47mln homes in 14 countries around the world.
For Sky, meanwhile, the deal represents a long awaited exit following James Murdoch’s move to build a strategic stake in ITV back in 2006 – it bought as much as 17.9% before the competition authorities forced Sky to reduce its stake.
The near £0.5bn cash injection comes ahead of a possible consolidation of BSkyB and its European associates Sky Deutschland and Sky Italia.