MARKET REPORT: ITV shares tumble as broadcaster tunes in to Channel 4 takeover bid
ITV shares sank as investors baulked at reports it could be thinking about a takeover bid for Channel 4.
The FTSE 100 broadcaster was one of the biggest blue-chip fallers, slipping 4.1 per cent, or 3.32p, to 78.68p, following reports it told ministers it was interested in making an offer after the Government confirmed plans to push ahead with a privatisation.
Channel 4 is publicly-owned but generates its revenues from advertising, meaning, unlike the BBC, it is not directly funded by the taxpayer. While ITV has yet to make a final decision on its plans to table an offer, the idea left a sour taste in investors’ mouths.
Impact: ITV shares sank as investors baulked at reports it could be thinking about a takeover bid for Channel 4
Some may be concerned that a swoop on Channel 4 could be blocked by regulators, as a merger would hand one company control of around 70 per cent of the UK’s TV advertising market.
Richard Hunter, head of markets at Interactive Investor, also highlighted the cost of the acquisition as well as the ‘risk’ of melding the channels together. He said: ‘At a time when streaming competition is intensifying, the benefits of this particular combined force could be limited.’
Imperial Brands gained after ‘good progress’ in its first half. The FTSE 100 maker of Rizla cigarettes rose 3.3 per cent, or 53p, to 1669p as it gained market share in the US, the UK and Australia, more than offsetting losses in Germany and Spain.
Profits for the six months to the end of March were also up year-on-year despite ‘broadly flat’ revenues caused by a weaker performance from tobacco products in Europe as consumer buying patterns reverted to pre-pandemic levels. However, Imperial noted that the second half was expected to be better as price increases boosted its revenues.
It said the outlook for the full year was ‘in line’ with guidance last month – a profit rise of around 1 per cent and revenue growth of 0.1 per cent.
The FTSE 100 was down 0.4 per cent, or 26.02 points, at 7587.70 while the FTSE 250 dropped 1.2 per cent, or 256.25 points, to 21,100.73.
The prospect of yet more sanctions on Russia amid reports of possible war crimes in Ukraine dampened market sentiment.
There were also worries that new Covid lockdowns in China will extend supply chain disruption, and that any US interest rates hike would tip the American economy into recession.
Oil prices were volatile over the session with Brent crude creeping back towards $110 a barrel before reversing course later in the day to around $104. The seesawing price was accompanied by a mixed performance for the major petro-stocks, with BP closing 0.5pc, or 2.1p lower, at 380.9p, while Shell inched up 0.2 per cent, or 3.5p, to 2124.5p.
Jitters over a global economic slowdown weighed on mining stocks as investors mulled the potential impact on commodity prices. Anglo American was down 2 per cent, or 82.5p, at 4050p while Glencore rose 0.4 per cent, or 1.8p, to 518.6p, Rio Tinto fell 0.2 per cent, or 11p, to 6109p and Antofagasta shed 2.1 per cent, or 35p, to 1676p.
Mid-cap miner Ferrexpo also sank 6.2 per cent, or 11.4p, to 171.6p.
Food supplier Hilton posted a profit of £67.2million for the year to January 2, up 13per cent year-on-year, boosted by surging demand for vegan and vegetarian dishes. The shares were down 1.8 per cent, or 22p, at 1200p. Rival Premier Foods rose 6 per cent, or 7p, to 124.4p.
UK shale gas group Igas Energy rose 0.2 per cent, or 0.1p, to 44.3p after boss Stephen Bowler said it could supply 3million homes within 12 to 18 months if backed. The comments came after the Government launched a review into its stance on shale gas and fracking.