July 31, 2015
Cable MSO Liberty Global has acquired 138.7 million shares in UK commercial broadcaster ITV plc, thereby increasing its existing stake to a total of 398.5 million shares in ITV or approximately 9.9 per cent of ITV’s ordinary shares outstanding. Liberty Global has at the same time nentered into a hedging transaction with respect to the ITV shares it has acquired and obtained further financingfrom its hedge counterparty. The acquisition of the additional ITV shares, combined with amending an existing hedging transaction with respect to ITV shares, will result in net cash being released to Liberty Global.
CEO Mike Fries said that given ITV’s operating and stock price performance, Liberty Global was able to increase its stake to 9.9 per cent with no incremental investment by hedging its existing equity position. “This investment remains an opportunistic one for us in our largest market. ITV is a well-run company with attractive growth potential, and we are pleased to increase our position as their largest shareholder,” he added.
With this level of investment, no prior regulatory approvals are required. Liberty Global’s stake in ITV and the related hedging arrangements are attributed to the Liberty Global Group for purposes of its tracking stock capital structure.
In accordance with the UK Takeover Code, Liberty Global confirmed that it did not intend to make an offer to acquire ITV.
Although Liberty Global does not intend to make such an offer, for the purposes of Rule 2.8 of the City Code on Takeovers and Mergers, Liberty Global does reserve the right, in the circumstances set out in Note 2 to Rule 2.8 of the Code or with the consent of the Takeover Panel, to announce an offer or possible offer or make or participate in an offer or possible offer for ITV (and/or take any other action which would otherwise be restricted by Rule 2.8 of the Code) within the next six months following the date of this announcement.
Liberty Global first acquired 259.8 million shares in ITV from British Sky Broadcasting Group (BSkyB) for some £481 (€683m) million in July 2104, giving it a 6.4 per cent stake. At the time, Fries, described the stake as “an opportunistic and attractive investment” for the operator in its largest cable market.
BSkyB acquired a then 17.9 per cent stake in ITV for £940 million, thwarting plans by NTL, later Virgin Media, to buy the broadcaster. Liberty Global acquired Virgin Media for $23.3 billion in February 2013. However, in December 2007, the UK’s Competition Commission ruled that BSkyB had to reduce its stake to 7.5 per cent.
In January 2008, the then business secretary, John Hutton, upheld the Competition Commission ruling, with BSkyB appealing to the Competition Appeal Tribunal in February 2008. The Competition Appeal Tribunal rejected the appeal outright in September 2008, with BSkyB being given leave to take its case to the Court of Appeal in March 2009.
In January 2010, the Court of Appeal rejected BSkyB’s case, with the satellite operator selling a 10.4 per cent stake in February 2010 at a £348 million loss.