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Mayfair fund takes 5pc stake in ITV as advertising downturn sends shares tumbling

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Published Time: 12.02.2024 - 22:40:28 Modified Time: 12.02.2024 - 22:40:28

Move makes Silchester International Investors one of the broadcaster's largest shareholders A Mayfair fund has taken a £120m stake in ITV as the broadcaster grapples with a deep advertising downturn and slump in its market value

Move makes Silchester International Investors one of the broadcaster's largest shareholders

A Mayfair fund has taken a £120m stake in ITV as the broadcaster grapples with a deep advertising downturn and slump in its market value.

Silchester International Investors has become one of ITV’s largest shareholders after snapping up a 5pc stake in the business.

The media-shy fund, which has also built a £500m stake in advertising giant WPP, states that its investment philosophy is to identify fairly valued businesses “capable of increasing earnings, assets and dividends by their own efforts”.

Its investment in ITV makes it one of the broadcaster’s top five shareholders.

The stake building is likely to stoke speculation about a potential sale or break-up of the public service broadcaster as it battles a sharp decline in advertising that has wreaked havoc across the TV sector.

Dame Carolyn McCall, chief executive of ITV, has described the downturn as the worst since the financial crisis, with ad revenues expected to fall by 8pc across 2023.

Shares in ITV, which is best known for programmes including I’m A Celebrity… Get Me Out of Here and Love Island, are down by more than 55pc over the last five years and are trading close to their lowest level since the financial crisis.

This has left the broadcaster with a market value of under £2.4bn, well below its peak of more than £11bn in 2015.

The dwindling valuation, coupled with broader concerns about the future of traditional TV in the streaming era, have fuelled speculation that ITV could become a takeover target.

Analysts said the upcoming renewal of ITV’s channel three licence, which will guarantee its status as a public service broadcaster for the next decade, would provide added certainty to any potential bidder.  

Alex DeGroote, a media analyst, said ITV was “just ripe for a break-up or sale”.

The broadcaster is battling with a decline in traditional TV viewing as audiences increasingly move to streaming rivals such as Netflix and Disney. It has launched its own streaming service, ITVX, in a bid to reach younger viewers.

Mr Bates vs The Post Office, a drama about a huge miscarriage of justice that saw hundreds of sub-postmasters wrongly accused of theft and fraud, last month became the channel’s biggest new drama in a decade, beating the launch of Downton Abbey in 2010.

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