ITV has long been ripe for an offer - but ComCast’s £1.6bn may not be the right one

Do a sum-of-the-parts analysis on ITV, City analysts have been saying for years, and you can come up with valuations way above the depressed share price. It’s just a question of someone making a decent offer for one of the two halves of the corporate entity - either ITV Studios, the production side that makes programmes such as Coronation Street, or the division that actually broadcasts the content and sells the advertising slots.

- Nils Pratley

Now someone has turned up: Sky, which was bought by the US giant Comcast for £30bn in 2018, has made a £1.6bn approach for ITV’s broadcasting operation. ITV’s share price gained 16% yesterday but, at 78p, it still stands way below some of the misty-eyed theoretical valuations. Why?

There’s the obvious fact that nothing is agreed yet. But there are three more basic factors. First, a £1.6bn price tag doesn’t look much for a broadcast division that, despite intensifying competition from Netflix, Disney and others, still made top-line operating profits of £250m last year. The Studios operation is undoubtedly the growing and more valuable part of ITV. Is £1.6bn really the most the broadcasting unit could fetch?

Second, the competition regulator - even when under orders from government to be “pro-growth” - will have a field day with a deal that would put the UK’s dominant free-to-air commercial broadcaster under the same corporate roof as the leading pay TV outfit in the UK.