ITV is in talks to buy All3Media, a TV and film production business owned by Warner Bros Discovery and Liberty Global.
ITV, which is also 10 per cent owned by Liberty, said on Friday that it was “actively exploring the possible acquisition of All3Media” but added that there “can be no certainty as to whether any transaction will take place, nor as to the terms of any such transaction”.
A tie-up between the two businesses has been mooted for some time given their common shareholder, as well as the need for ITV to bulk up its production arm as its broadcast operations are hit by a slowing advertising market.
All3Media, the group behind programmes such as Gogglebox and Fleabag, is estimated to be worth as much as £1bn by analysts, who have said that Liberty might seek to take a bigger shareholding in ITV as part of a deal.
One person familiar with the talks said that Liberty could raise its shareholding in ITV — either as part of the potential deal or in a separate transaction — but that would be complicated given the desire by Warner Bros Discovery to sell its stake to raise cash.
Other bidders could emerge for the company but may be deterred by the existing ties between ITV, All3Media and Warner Bros Discovery, where Liberty Global tycoon John Malone is also a shareholder and sits on the board.
Liberty and Discovery acquired All3Media for more than £500mn in 2014 from majority shareholder Permira, the UK buyout group. All3Media is made up of more than 50 production and distribution companies in the UK, Europe, New Zealand and the US.
ITV has already warned that advertising revenues dropped in the first three months of the year, but expected that to be partly offset by revenue growth at ITV Studios, which makes shows such as Love Island.
The London-listed company is seeking to make a greater share of its revenue from producing TV shows, both for its own channels and to sell globally to other broadcasters and streaming services.
The group said its balance sheet remained “robust”, which could allow the company to consider acquisitions such as All3Media.
The deal would still be significant for ITV, which has been distracted in recent weeks by the controversy around its TV show This Morning after presenter Phillip Schofield was forced to resign after admitting he had lied to bosses over an “unwise, but not illegal” affair with a younger male colleague.
