Shares ITV (ITV) failed to fire despite recent reports that French media giant Banjay was in early talks with the free-to-air broadcaster to buy the whole group or just its studio production arm.

Banjay’s plans were first reported in the Financial Times and follow speculation about an approach from Abu Dhabi-backed media group RedBird IMI in January this year.

RedBird IMI was apparently keen on merging the ITV Studios business with All3Media, the producer of hit TV show Traitors. If Banjay is successful, the merger would create one of Europe’s largest TV production groups.

Banjay was originally formed back in 2008 and produced TV shows such as Peaky Blinders, MasterChef and Big Brother. In 2020, it surprised analysts by buying Endemol Shine for £2.2 billion. The TV arm Banjay Entertainment is now part of a Euronext-listed Banjay Group (BNJ:AMS) which incorporates live events and betting businesses and has a market cap of €3.6 billion.

ITV shares have lost two thirds of their value over the last decade leaving it vulnerable to bid interest.

Russ Mould, investment director at AJ Bell said: ‘ITV has been flagged as a “bid target” for what feels like forever, as the media industry continues to reshape itself, and rumours of an approach last surfaced in late 2024.

‘The case for ITV as an investment – or bid target – lies with its prime programming, since content is still extremely valuable as streaming services and broadcasters look to win and keep both subscribers and advertisers. ITV has plenty of that in its well-stocked library of famous and well-loved TV programmes.

‘Ultimately, however, a bid would come down to cold, hard maths. ITV has a market cap of around £2.9 billion. Any buyer will also have to consider its £823 million in gross debt and £105 million in lease liabilities as part of the purchase price, although these will be partly offset by a £427 million cash pile and £137 million net pension surplus – that lot nets off at an extra £364 million on top of the market cap, which is not a formidable obstacle, although a buyer would presumably have to offer a bid premium.’

Another factor to consider is Liberty Global’s position. The media group remains ITV’s largest shareholder and it has previously been pegged as a suitor for the group. 

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Tom Sieber) own shares in AJ Bell. 

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