Investec puts ITV under review amid takeover speculation

17th Jul 2014 10:40

Even though Liberty Global has signalled that it has no intention to bid for ITV following the acquisition of a 6.4% stake in the broadcaster, Investec has said that takeover speculation is "now likely to be a key part of the investment case" for the UK group.The broker has placed its 'hold' rating and 195p target price for ITV under review.Liberty Global's Chief Executive Mike Frie said that the purchase of ITV shares from BSkyB was "an opportunistic and attractive investment" and will not be followed by an offer to acquire the whole of the company. This implies a six-month moratorium under UK Takeover Panel rules "unless another player appears".Nevertheless, Investec said that by applying a rough enterprise value-to-operating profits multiple of 12, a takeover could value ITV at around 215p based on 2014 forecasts, equal to around £8.65bn. ITV currently trades at a 10.5 multiple.However, Investec said: "The key question is whether this implies a 100% Liberty Media acquisition of ITV in time - is it happy at just 6.4%."Given recent Liberty Global M&A appetite, we see speculation of further M&A as almost inevitable mid-term implying ITV shares are likely to be valued more on a take-over basis."ITV shares were up nearly 10% at 201.7p by 11:01.BC