U.K. broadcaster ITV has confirmed it has received a £1.6 billion ($2.1 billion) bid from Comcast’s pay-TV platform Sky for its media and entertainment unit.
The shock news — which would fundamentally change the British broadcasting landscape if it were to go ahead — would see Comcast take control of ITV’s linear channels and ITVX streaming business, significantly expanding its U.K. TV foothold, having already acquired Sky for around $30 billion in 2018.
According to news reports, the bid from Sky centers on the potential creation of a U.K.-focused streaming giant.
In a short statement sent Friday morning, ITV said it noted “the recent press speculation and confirms that it is in preliminary discussions regarding a possible sale of its M&E business to Sky for an enterprise value of £1.6bn.”
It added: “There can be no certainty as to the terms upon which any potential sale may be agreed or whether any transaction will take place. A further announcement will be made in due course if appropriate.”
The discussions do not include ITV’s production and sales arm, ITV Studios, which makes shows including “Love Island,” “I’m a Celebrity” and the drama “Mr Bates vs The Post Office” and has been the center of numerous recent takeover rumors. RedBird IMI and Banijay are understood to have expressed an interest in the unit.
Despite only being preliminary, the idea of a sale of ITV’s TV business to Sky — which would require regulatory approval — has sent the U.K. broadcasting world into a spin.
“ITV’s proposed £1.6 billion sale of its Media & Entertainment division to Sky could mark a turning point for British television,” said Giao Pacey, partner and corporate lawyer at media and entertainment law firm Simkins LLP. “It’s not just a divestment, it’s a sign that U.K. broadcasters are rethinking how they operate in a fast-moving media landscape. By offloading its traditional TV channels and streaming service ITVX, ITV is aiming to reduce its reliance on advertising, which can be unpredictable, and instead focus on producing content it can sell globally.”
Confirmation of the deal talks came shortly after ITV reported that it would “temporarily” shave $46 million from its budgets over the U.K.’s “softening economy” and advertiser uncertainty. It said it expected ad revenues to fall by 9% in the key fourth-quarter period in the lead up to Christmas.
ITV shares jumped 18% at the start of trading in London on Friday following news of a potential deal with Sky.