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Liberty Global ups ITV stake

US cable giant Liberty Global has increased its stake in ITV to 9.9%, but has again ruled out making a full takeover bid for the UK commercial broadcaster.

Liberty chairman John Malone

Liberty chairman John Malone

No financial details of Liberty’s stake increase have been given, but the company has now acquired 138.7 million ITV shares. It is estimated the additional stake has a value of around £380m (US$591m).

Liberty, which owns UK pay TV company Virgin Media, acquired satcaster BSkyB’s 6.4% stake in ITV for £481m this time last year.

“Given ITV’s operating and stock price performance, we were able to increase our stake to 9.9% with no incremental investment by hedging our existing equity position,” Liberty CEO Mike Fries said. “This investment remains an opportunistic one for us in our largest market.”

John Malone’s firm again confirmed it did not intend to make an offer to take over ITV, reiterating the stance it took in March.

However, analysts such as Peel Hunt’s Alex DeGroote continue to tell C21 that they expect ITV to sell up to a US media giant within 12 to 18 months, and are not ruling Liberty out of the race. Writing today, Ian Whittaker, an analyst at Liberum, also said the new deal could help warn off an advance on ITV from rivals.

“Liberty has stated it does not intend to make a bid for ITV but its move suggests it thinks a move by another player is likely or, at least, an increasing possibility,” he said.

The deal could help Liberty’s strategy to own more production and content instead of distributing shows through its cable networks. In May 2014, the firm bought into superindie All3Media in partnership with Discovery Communications for £550m.

Over in the Republic of Ireland last month, Liberty-owned UPC Ireland signed a deal to buy commercial broadcaster TV3 Ireland in a deal worth up to €87m (US$96m).

The deal comes in the same week that ITV posted better-than-expected profits for the first half of the year.

No regulatory approval is required for a stake of this size.

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