Hollywood’s Chernin, Banijay’s owner in talks on ITV Studios

Veteran Hollywood producer Peter Chernin and French TV production group Banijay’s parent have expressed interest in UK broadcaster ITV’s Studios, the maker of hit show “Love Island”, sources familiar with the matter told Reuters.

Other private equity-backed studios firms have also assessed the asset on and off in recent months, the sources said. The business has been valued at as much as 3 billion pounds ($3.7 billion), according to analysts.

ITV, Britain’s biggest free-to-air commercial broadcaster, is open to selling a minority stake in Studios to a strategic partner such as a larger TV producer or private equity firm with production assets, the sources said, but it wants to retain majority control.

The sources declined to be identified because the matter is confidential.

Both Chernin’s co-production vehicle North Road and Banijay-parent FL Entertainment would prefer to control the business, which has been a stumbling block in a potential deal, the sources said.

ITV and FL Entertainment declined to comment. North Road did not respond to requests for comment.

The sources said discussions with interested parties have been ongoing in recent months, although no formal process was under way and banks have not been officially appointed to advise.

Chernin, known for the revival of “Planet of the Apes” and “Hidden Figures”, set up North Road last summer after he raised $800 million from private equity firms Providence and Apollo to fund acquisitions in the United States and abroad.

Providence, which owns a stake in North Road, also declined to comment for this story.

Banijay, which produces reality shows such as “Big Brother”, “MasterChef” and “Survivor”, became part of French entrepreneur Stephane Courbit’s FL Entertainment in a SPAC listing in July. It has made more than 25 acquisitions since 2008.

ITV built up its Studios production business in the last decade to reduce its reliance on the British advertising market and tap into rising global demand for content.

More than half of its revenue comes from outside Britain, and it is targeting annual growth of at least 5% for the next three years, helped by a slate that includes game show “The Chase” and dramas like “Line of Duty”.

Revenue in the nine months to end-September rose 16% to 1.39 billion pounds ($1.71 billion).

But for investors, growth in Studios has been overshadowed by spending on the newly launched ITVX streaming service and worries about the resilience of advertising. ITV’s shares are down 27% in the last 12 months.

Chief Executive Carolyn McCall said last month that ITV was reviewing options for Studios, but that it would not do something “short term or tactical in order to prove value”.

“So it’s definitely not for sale,” she added. Reuters