Adds second investor's views in paragraphs 7 and 11

By Paul Sandle, Iain Withers and Anousha Sakoui

LONDON, July 9 (Reuters) - ITV's ITV.L long-awaited deal to sell its broadcasting business to pay-TV company Sky for up to £1.6 billion ($2.14 billion) has dented its shares as analysts focus on separation costs, ongoing expenses and regulatory delays.

After initially rising 1.2% on news of the transaction on Monday, ITV shares reversed course and were down around 10% by Thursday. JPMorgan cut its rating and price target following the deal earlier this week.

"ITV has not been able to secure the deal that we had hoped for," said Daniel Kerven, an analyst at JPMorgan, who downgraded his view "reflecting the lower disposal price, separation costs and stranded Studios costs".

After at least eight months of talks with Comcast's CMCSA.O Sky, ITV said it would receive £1.2 billion in cash, £200 million from the contribution of Love Productions and £200 million contingent on ITV's 2027 ad revenue.

But analysts pointed to about £150 million of separation costs and roughly £200 million of stranded costs that cannot be immediately removed.

INVESTOR VIEWS ARE GENERALLY POSITIVE

The share price reaction contrasts with generally positive investor views on ITV's decision to exit a structurally declining broadcast business.

Two top-20 investors, who declined to be named, said the deal left a strong standalone production business that was well-positioned to grow, although one said the sale price for the broadcast unit likely undervalued the long-term cost-cutting potential for Sky from overlapping operations.

A top-30 shareholder, also requesting anonymity, was happy ITV had agreed to sell a unit that the investor described as a melting ice cube with no future as it stood, but acknowledged the market had focused on the separation costs and the expectation the deal will take time to complete.

The deal also faces a long investigation by competition authorities and ITV said it expected completion within 12 to 18 months.

Changes to UK listing rules in 2024 mean the transaction, equal to about 58% of ITV's market capitalisation, will not require a shareholder vote.

One of the top-20 investors said it was disappointing not to get a vote and shareholders had lost a significant role in their relationships with companies, adding regulators should consider changes.

The rules, designed to help London keep up with New York and the European Union, removed a requirement for companies to seek a shareholder vote on significant transactions, with the exception of reverse takeovers and a listing.

ITV's is one of the largest deals so far to take advantage of the rules after Vodafone Group sold its Italian assets to Swisscom without a vote in 2024.

($1 = 0.7460 pounds)