The ITV (LSE: ITV) share price spiked upwards on 25 November, as talk circulated of a possible takeover bid.

The rumours put private equity firm CVC Capital Partners as a top potential bidder. A major European broadcaster, thought to be France’s Groupe TF1 is also on the list of suspects. As are All3Media, owned by RedBird Capital, and KKR-backed Mediawan.

Is there anyone not lining up a buyout?

Undervalued shares

None of the possible approaches seems to have gone far as yet. But if competing offers come out in the new few months they could drive the share price up.

The effect of the rumours does have to be taken in context, mind. The price rise only puts ITV shares back where they were before a 7 November Q3 update.

We saw a 20% drop in ITV Studios’ revenue, hit by the US writers and actors strike. The board still says the company is on track to achieve record FY profits. Digital advertising revenue rose 15%.

What does the City think?

Forecasts won’t mean anything if ITV is bought out. But as they stand, they paint an optimistic picture. Analysts are generally bullish about the stock, with a fairly healthy ‘buy’ rating on it.

Earnings are forecast to stay about the same up to 2026, with the dividend rising only modestly between 2023 and 2026.

But even based on that fairly static outlook, we’d see ITV shares on price-to-earnings (P/E) multiples of between 8.5 and 10 in the next few years. The expected dividends suggest yields of 6.8% to 7% on the current share price.

Those potential bidders are not the only ones who see the stock as good value. ITV has itself been on a share buyback spree for much of the year.

The next 12 months

Analysts have an average share price target of 88p for the next 12 months, up 20% from today. And the most bullish sees a potential gain of 55%.

I’m only interested in ITV for its long-term value. But with so much attention on the company now, the next few months could prove crucial. And that could depend on where the board’s 2025 outlook goes at the end of the current year.

We have to wait until 6 March for FY results, but Q3 gave us a few clues.

ITV outlook

So far the board expects “ITV Studios to deliver record adjusted EBITA, at a margin within our 13 to 15% target range“. That’s even with a mid-single-digit revenue decline due to the strikes, which should still mean “total organic revenue growth of 5% on average per annum from 2021 to 2026“.

Over at the Media & Entertainment arm, the crystal ball shows total advertising revenue up 2.5%, with ITV “on track to deliver at least £750 million of digital revenues in 2026“.

Should investors consider buying ITV now? If I do, I’ll base it on long-term value and not on hopes of a short-term takeover profit.