ITV Share Price Surged 15.9% on Selling BritBox Stake for £255M

The ITV plc (LON: ITV) share price surged by 15.9% after announcing the sale of its 50% ownership in BritBox International, a digital subscription streaming service, to BBC Studios, its partner in the joint venture. The transaction, valued at £255 million in cash, marks a pivotal step in ITV's strategic realignment towards enhancing its core operations. 

The net proceeds from the sale, estimated to be around £235 million after adjusting for loan repayments, accrued dividends, and taxes, signify a substantial financial boost for ITV. This divestiture aligns with ITV's strategic pivot towards prioritising the growth and development of its UK advertiser-funded streaming service, ITVX, alongside expanding its global Studios division.

The decision to sell its stake in BritBox International reflects ITV's commitment to streamlining its operations and focusing on areas with the potential for high growth and profitability. By concentrating on ITVX, ITV aims to solidify its position in the competitive streaming market, offering a unique proposition that leverages its advertising model to differentiate from subscription-only services.

In parallel, ITV's global Studios division stands to benefit from the company's sharpened focus and the infusion of capital from the sale. This division, known for producing high-quality content that resonates with global audiences, is poised for further growth and expansion, reinforcing ITV's presence on the international stage.

Following the announcement of its full-year results on March 7, ITV's Board plans to initiate a share buyback program, returning the entire net sale proceeds to its shareholders. This move underscores the company's confidence in its strategic direction and its commitment to delivering value to its shareholders.

Under the terms of the agreement with BBC Studios, ITV Studios will not sever its ties with BritBox International entirely. Instead, it will continue to benefit from an ongoing revenue stream akin to current levels through new extended licensing agreements allowing ITV content on BritBox International.

It is also important to note that the transaction does not affect BritBox UK, which remains a separate entity. BritBox UK will continue to feature BBC content as part of separate, long-standing agreements, ensuring that subscribers to the service in the UK continue to enjoy a rich and diverse content offering.

ITV share price. 

The ITV share price surged 15.91% to trade at 64.92p from Thursday’s closing price of 56.01p.