Liberty Global sells half its ITV stake in placing, shares tumble

(Sharecast News) - ITV tumbled on Wednesday after its largest shareholder, Liberty Global, sold half its stake in the broadcaster in a placing, raising about £135m. Liberty Global sold just over 193.3 million shares, representing a stake of around 5%. They were sold to institutional investors by way of an accelerated bookbuild process.

Following settlement of the placing, Liberty Global's interest in ITV will reduce to around 5% from 10%.

At 0935 BST, ITV shares were down 8.3% at 68.40p.

Dan Coatsworth, head of markets at AJ Bell, said: "Liberty Global halving its stake in ITV is a significant development as it effectively removes a potential blocker if someone makes a takeover offer for the media group.

"Liberty Global previously held 10% of ITV which effectively gave it a front seat to either consider a bid down the line, or to stop others swooping in on the cheap. It originally bought a 6.4% stake from Sky and then topped up, citing the stake purely as an investment.

"Over the years, Liberty Global showed no interest in wanting to own ITV outright but it stayed put on the shareholder register, quietly observing as the media group was subject to perennial bid talk.

"For years, people have speculated that ITV would be an attractive takeover target as its shares were cheap and it offered a mixture of broadcasting and content creation skills.

"Various production companies, private equity and even Netflix have been touted as potential buyers for ITV, but there has always been the sticky issue of whether someone would want the whole company or just the studios arm.

"Liberty Global selling down is likely to rekindle speculation over who might want to buy the business. Before that might happen, investors need to digest why ITV's biggest shareholder has taken its first steps down the exit path."

Coatsworth said the sale implies that Liberty Global offloaded its block of shares at below Tuesday's closing price.

"Investors might be concerned as to why Liberty Global has chosen to sell half of its position at time when the shares were trading close to a six-month low," he said. "Many large investors wait for a share price to be high before selling down."