As investors struggle to make sense of the latest eurozone pronouncements and become nervous again about the outcome of the US Federal Reserve meeting, ITV continues to gain ground on bid talk.
The broadcaster is also being boosted by news of a tender offer for up to £250m of its bonds, which would lower its interest payments. Traders said this could also aid a possible takeover of the business by private equity, the rumour that did the rounds on Tuesday.
ITV's shares are up 2p at 76.25p, the leading riser in the FTSE 100 albeit well short of the speculated 150p a share bid. Ian Whittaker said the takeover tale had been heard many times before, but pointed out that one of the speculated parties, KKR, is the co-controller of Germany's ProSieben. He added:
Given ITV is heavily cash positive (around £280m by the year end), this would be attractive to a private equity buyer especially given ITV's recent £250m bond buyback, which lessens the bond buyback complications inherent in any takeover.
As he said, ITV has been the subject of many takeover tales in recent times, with even Apple mentioned as a potential buyer at one point.
On the bond move Alex DeGroote at Panmure Gordon said:
Very sensible treasury action. ITV has around £1bn cash on its balance sheet. Hopefully this will persuade the (stock) market that ITV is more than just a play on advertising.
The market is plainly obsessed by advertising momentum. This may have deteriorated in the third quarter, following a very strong second quarter. It remains volatile. At the same time, the Premier League auction (sports rights) highlighted the value of content. ITV is major content player, with more than 20% of EBITDA coming from Studios now.
Overall the market is edging lower after Tuesday's gains. The US Fed is widely expected to introduce further stimulus for the world's largest economy after its meeting later, which boosted shares in anticipation. But there is room for severe disappointment if the Fed does not do as expected.
Meanwhile confusions reigns over what was agreed at the G20 summit on the eurozone crisis. There was talk of a plan to buy up Italian and Spanish bonds with the €750bn bailout fund, but German officials said nothing had yet been decided. So the FTSE 100 is down 10.12 points at 5576.19.
The biggest fallers are water companies, but only because they have gone ex-dividend. Severn Trent is down 115p at £16.34 - a 6.5% decline - after shareholders lost the right to a 42p dividend and a 63p special payment. United Utilities - also ex-div - is down 24.5p at 645p.
