DealBook: Liberty Global to Buy Stake in British Broadcaster 1TV

LONDON — John C. Malone's Liberty Global agreed on Thursday to buy a minority stake in the British broadcaster ITV, further expanding the international cable company's reach into Europe.

Liberty Global, which has spent billions of dollars to acquire several cable businesses across Europe, is buying the 6.4 percent stake from BSkyB for 481 million pounds, or $824 million.

BSkyB, the British satellite broadcaster, is 39 percent owned by 21st Century Fox. The agreement comes after 21st Century Fox made an $80 billion bid for the American media giant Time Warner Inc., which rejected the proposed takeover.

Liberty Global, which is based in London, said that it did not plan to make an offer to buy ITV, which produces popular shows like Downton Abbey, but that it reserved the right to put forward a takeover bid in the future.

Analysts said that Liberty Global's move could lead to further consolidation in Europe's telecom and media industries.

Over the last two years, several telecom providers, including Liberty Global, Vodafone of Britain and Telefónica of Spain, have spent billions of dollars to acquire fixed-line and mobile telephone networks.

The European companies also have increasingly signed media content deals to gain access to television programs, films and music to meet the demands of their customers.

"It is hard to read this move as anything other than an indication of its loner-term intentions," Ian Whittaker, an analyst at Liberum Capital in London. "At the very least, it sends a signal to other potentially interested parties that they would face a possible fight for the asset."

Shares in ITV rose 8.5 percent in morning trading in London on Thursday.

"This is an opportunistic and attractive investment for us in our largest cable market," Liberty Global's chief executive, Mike Fries, said in a statement. "ITV is the leading commercial broadcaster in the UK and we're excited to be shareholders."

The efforts by Liberty Global to expand beyond its core cable operations is part of a broader trend within the telecom and media industries where major players are buying assets to consolidate existing businesses and expand into new areas.

Earlier this year, Liberty Global and Discovery Communications agreed to buy the British television producer All3Media for £550 million, while BSkyB is in early-stage talks to combine its British pay-TV assets with the Italian and German broadcasting units of 21st Century Fox.

BSkyB will retain a stake of less than 1 percent in ITV. It first bought a 17.9 percent holding in ITV in 2006 for £940 million, but has progressively sold that down over the last decade.

"The deal between Liberty Global and BSkyB is yet another key sign that the pay-TV provider is raising funds to expand into Europe," said Paolo Pescatore, director of apps and media at the research analysis company CCS Insight, in reference to BSkyB. "This is a good move for Liberty Global whose recent deal with All3Media sends strong signals from the cable company that to compete it cannot rely on just connectivity alone."

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