ITV: Mayfair hedge fund snaps up stake as broadcaster grapples with ‘ad recession’
A secretive Mayfair-based hedge fund has snapped up a stake in ITV reigniting speculation about the company’s future.
Silchester International, which previously built a £500m position in advertising giant WPP, has taken a five per cent stake in the UK’s largest commercial broadcaster worth nearly £120m, filings show.
The media-shy investment outfit, founded in 1994 and based on Bruton Street in Mayfair, describes itself as an “international equity investment” specialist that manages money on behalf of institutional investors.
Describing its philosophy, Silchester says it “seeks to identify companies capable of increasing earnings, assets and dividends by their own efforts”.
The move on ITV comes as the firm is rocked by a slowdown in advertising revenue, with bosses warning last July that the firm was grappling with the “worst advertising recession since the global financial crisis.”
At its third-quarter update in November, ITV said it expects total ad revenue for its full year to be down eight per cent for the year.
ITV’s share price has been hammered as a result and the firm has shed more than 32 per cent of its value over the past year. The downturn has left the firm with a market capitalisation of under £2.4bn from a peak of around £11bn in 2015.
Silchester’s move may fuel speculation of a potential break-up of the firm. Alex de Groote, a media analyst, said the firm was “ripe for a break up”, the Telegraph reported.
ITV was contacted for comment.