Sky deal talks with ITV have slowed - report

(Sharecast News) - Sky's talks with London-listed broadcaster ITV about buying its broadcast channels and streaming platform have reportedly slowed in recent weeks, as the battle to buy Warner Bros Discovery disrupts the industry. ITV announced in November that it was in talks to sell its media and entertainment unit to Comcast-owned Sky for £1.6bn.

According to Reuters, citing people with knowledge of the matter, there has been a lull in engagement from Comcast's Philadelphia headquarters.

"They have slowed in recent weeks," one of the people said, referring to the talks.

It was understood that the reasons include complications related to the spin-out of Studios, which makes many of ITV's biggest shows.

Spokespeople for ITV, Sky and Comcast declined to comment to Reuters.

Dan Coatsworth, head of markets at AJ Bell, said: "The market is waiting with bated breath for an update on Sky's desire to buy ITV's broadcast and streaming operations. Reports suggest talks have slowed, implying this is far from a done deal.

"The approach last November triggered a big jump in ITV's share price, and the stock has stayed firm ever since. The latest twist to the story has triggered a share price wobble, but the decline is only minor which implies that investors are still hopeful a deal can be done.

"ITV last year revealed that Sky has proposed a deal worth £1.6 billion, but it didn't say whether that price was the right one to get it over the line. It's possible that ITV's board is pushing for more, hence why talks have slowed.

"For years, analysts have said ITV was worth considerably more broken up, with the studios business being significantly undervalued by the market.

"ITV's shares have traded on a low valuation as the market has worried about the long-term future of linear TV viewing and unpredictable advertising income.

"The Studios production arm has sat within the group as a hidden gem and splitting the company in two, such as via selling the broadcast bit to Comcast, could in theory trigger a re-rating in ITV's stock."

Coatsworth said the investment case would change as elements of uncertainty linked to broadcasting and advertising would be removed.

"In doing so, the remaining bit of ITV could become an instant takeover target for someone looking to get their hands on high-quality production capabilities. Content is king in today's streaming world."