Will Comcast/NBC spark a bidding war for ITV?

ITV shareholders may be in for a 2016 bonanza if the Mail on Sunday’s report that US giant Comcast, the biggest cable operator, is planning an £11bn bid for the British broadcaster via its NBC Universal film and television offshoot is to be believed.

ITV’s biggest shareholder is rival cable operator Liberty Media with 9.9 per cent. Liberty, which owns the UK’s Virgin Media, would be likely to enter a bidding war or, at the very least, force the price up. ITV is currently valued at £10.5bn so credible bids would have to start at around £12bn.

Comcast has come under fire recently in the US for poor service and over-billing but it’s also awash with cash. In 2014 it agreed a $45bn merger with Tim Warner Cable, which would have seen Comcast in charge, but this foundered on regulatory and other fears. ITV would be a mere snip by comparison.

ITV-London-Television-Cen-008ITV’s attraction is not just its £1.6bn ad revenue but the nearly £1bn it makes from content sales and production, by ITV Studios and also a string of overseas producers it has acquired. Comcast, like other cable and satellite companies that depend on ‘bundled’ channel packages is under threat from operators like Netflix and Amazon Prime that allow customers to cherry pick what they want. Exclusive content is the key to keeping these packages attractive, which is why the likes of BT and Sky spend so much on football and other sports.

Whether or not a US takeover of ITV would affect the British ad market, in which ITV is still the dominant player, is a moot point. Smaller rival Channel 5 is now in the hands of Viacom.

But ITV, helmed by Adam Crozier, looks to be a winner whatever happens. News of Comcast’s interest will also spark the attentions of Vodafone, trying to spend its cash pile on something, Apple and Google.

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