An unbelievable 19 FTSE 250 shares have been takeover targets this yr, in accordance with research from AJ Bell.

Of those, 9 offers accomplished, together with Centamin, Redrow and Virgin Cash, whereas one other six are in progress, notably Britvic and Direct Line. Throughout the FTSE 350, takeover exercise tripled in comparison with 2023. 

AJ Bell funding analyst Dan Coatsworth mentioned many targets have been beforehand “unloved or underappreciated”, and consumers couldn’t resist their low share costs. Love Island and Downton Abbey maker ITV (LSE: ITV) could also be subsequent.

The share price makes compulsive viewing

Takeover rumours have swirled across the TV broadcaster for years, however Coatsworth thinks latest hypothesis may very well be credible: “Private equity, a rival broadcaster or even a streaming platform could show interest.”

That’s definitely the way in which traders are betting. The ITV share price surged on 25 November, following stories that potential suitors are in early discussions with the board. We don’t know the way severe this curiosity is, or whether or not the ITV board welcomes it.

ITV has laboured as Hollywood strikes disrupted TV and movie productions, whereas promoting revenue has been bumpy.

Coatsworth describes ITV’s Studios content material arm as a hidden gem, doubtlessly value greater than the market worth of your complete group: “Someone like Netflix could gobble up ITV for a fraction of its annual content spend and access its rich library of programmes.”

He says the ITVX streaming platform has crushed expectations and supplies precious insights into consumer viewing habits, which permits massive manufacturers to focus on clients. ITV might even be damaged up and bought individually, Studios going to 1 bidder, it’s broadcasting arm and ITVX to a different.

2025 might see a string of UK inventory acquisitions

As a rule, I don’t purchase on takeover discuss, which so typically involves nothing. But many traders do, with the ITV share price leaping virtually 18% within the final month. This flatters latest efficiency figures, because the shares at the moment are up almost 16% over one yr. They’re down a brutal 53% over 5 years, which provides a clearer image of its troubles.

In consequence ITV look grime low cost buying and selling at 9.53 instances trailing earnings, whereas the trailing yield is a bumper 6.8%.

Regardless of my sniffy resistance to purchasing shares on market rumours, there are arguments for doing so. Many UK shares look undervalued proper now, which suggests bidders are keen to pay a premium price and drive up valuations.

Latest bid exercise has acted as a wake-up name for traders, persuading them to re-appraise the corporate in query. That is very true if the board rejects bids, and even a number of bids. It makes traders marvel in the event that they’re lacking one thing. Coatsworth notes that shares in Anglo American, Rightmove and Currys have all revived after the boards fought off consumers moderately than taking the cash.

ITV shares have idled in latest days as takeover information dries up. I don’t want the short-term uncertainty, so I received’t purchase them myself. Those that do proceed to contemplate it might discover the inventory onerous to withstand. ITV definitely seems to be low cost and has an enormous yield.