ITV spurns bid by consortium of equity partners

ITV spurns bid by consortium of equity partners

	Published : Wed, 22 Mar 2006 16:40 By : Andrew Stead Print this Story

LONDON: ITV Plc., Britain's top commercial broadcaster, has rejected an approach by a consortium comprising Apax Partners, Blackstone Group and a private equity arm of Goldman Sachs for acquiring a controlling stake in its business.

ITV stated it was not sure of its shareholders receiving an appropriate premium on their stake and hence its board rejected the offer.

Sources close to the consortium said it had proposed a plan to purchase 1.5 billion pounds in newly issued ITV shares. The proposal included return of 3.55 billion pounds, or 86 pence a share, to the shareholders, which in turn would have increased the company's debt.

The plan also envisaged ITV to continue to be a publicly quoted company, as existing shareholders will be given option to remain investors along with the consortium.

The sources also mentioned the name of Greg Dyke, former director general of BBC, who is associated with Apax, as interested in heading the management of ITV if the bid is successful.

Apax and Goldman Sachs refused to comment on ITV's decision.

ITV has been seeing decline in viewership as well as in its advertising revenue at its ITV1 as Britain is poised to shift to multichannel TV. The company had posted a 36 per cent increase in its underlying 2005 profit, largely on account of lower licence payments to the government. It had then warned of decline in the revenues of ITV1, as many households are switching over to digital television.

The company had launched several digital channels on the Freeview platform and had predicted 250 million pounds in multichannel and interactive revenues by the end of 2008.

ITV, formed by the merger of Carlton and Granada in 2004, has been in the limelight over bid speculation as a number of private equity firms had expressed interest because of its low debt levels and a good stream of cashflows.

ITV shares, which rose 10 per cent after bid was reported in newspapers, climbed further to 129 pence to become the top gainer on the FTSE 100 Index, valuing the company at about 5.3 billion pounds.