UK competition watchdog asks for comment on ITV M&E sale to Sky
The UK Competition & Markets Authority has issued an invitation to comment on the agreed acquisition of ITV Media & Entertainment Holdings Ltd to Comcast Corp's Sky.
The regulator is seeking "any initial views on the impact that the transaction could have on competition in the UK," although it has not yet launched a formal investigation.
The deadline for comments is August 6.
London-based television broadcaster and content producer ITV announced in early July that it had agreed to sell its Media & Entertainment business to Sky, a wholly owned subsidiary of Comcast, for up to £1.6 billion.
Through the deal, ITV said it would receive £1.2 billion in cash, Sky's Love Productions business [which was valued at £200 million], and up to £200 million in cash, payable in the second half of 2028 and linked to 2027 advertising performance.
"In our view, Sky is paying fair value for M&E with Sky keeping all of the upside from cost savings, synergies and strategic benefits," JPMorgan analyst Daniel Kerven subsequently commented. JPMorgan cut ITV's rating to 'neutral' from 'overweight', and reduced the price target to 85 pence from 104p.
ITV will incur transaction and separation costs of £185 million gross, or £155 million net of tax, over the next three to four years.
It will first use the proceeds to de-lever ITV Studios to around 1.5 times net debt to earnings before interest, tax, depreciation and amortisation post-completion. It then expects to return around £950 million to shareholders, equivalent to 25p per share.
Shares in ITV were down 1.6% at 72.90p on Thursday afternoon in London. Comcast shares were down 1.1% at USD23.27 pre-market in New York.
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