ITV sells Britbox stake to BBC for £255m to fund share buyback
ITV has offloaded its entire 50 per cent stake in the digital subscription streaming service, BritBox International, to BBC Studios.
Shares in ITV soared 15 per cent after it said it has offloaded its entire 50 per cent stake in the digital subscription streaming service, Britbox International, to its joint venture partner BBC Studios.
The deal, valued at £255m in cash, is an effort by the broadcaster at “supercharging” its UK advertiser-funded streaming service, ITVX, and bolster its global Studios division.
“The sale of 50% of Britbox International means ITV is focused on its core strategic goals of continuing to build on ITVX’s success and growing ITV Studios,” said Carolyn McCall, ITV chief executive.
With net proceeds estimated at around £235m, including loan repayments, dividends and after tax, ITV aims to return the funds to shareholders through a share buyback initiative.
It will launch this “imminently” after its upcoming full-year results announcement on 7 March.
Despite the divestment, ITV Studios will maintain an ongoing revenue stream from Britbox International through extended licensing agreements for ITV content.
ITV’s decision to sell its Britbox stake was “inevitable” as its focus has been elsewhere on growing its onw ITVX streaming platform, according to Russ Mould, investment director at AJ Bell.
“It always seemed like an odd fit to be in a 50:50 venture with an arch-rival and bowing out effectively signals that BritBox wasn’t worth the effort for ITV,” Mould added.
Tom Fussell, chief executive of BBC Studios, said: “This is an important acquisition for us. We are taking full ownership of a successful, growing service we know well and that fits with our stated ambition to double the size of our business.
“Britbox International has British content at its heart and it generates and satisfies demand for British shows outside the UK. We will continue to make significant investments in the future to deliver long term value to the BBC.”
“BritBox International was always the runt of the litter when it came to streaming services, with a primary focus on classic British TV productions rather than competing against Netflix, Disney and Amazon with big name films and shows. While there is an audience for this type of content, it’s much smaller compared to the mainstream platforms.
