Northern Irish multimedia group UTV has apparently re-entered discussions with SMG about a possible merger, according to reports in the trade press.
SMG, which owns cinema advertising business Pearl & Dean and Virgin Radio, confirmed in August that it had received a merger bid from UTV which would have given SMG shareholders 50% of the combined company (see
UTV Merger Bid For SMG).
However, in September UTV announced that it was no longer interested in pursuing the merger, having taken into account SMG’s interim results and the ongoing weakness in the advertising market (see UTV Withdraws SMG Merger Proposal).
Having withdrawn from the merger, the city code on takeovers and mergers says that UTV cannot announce an offer or possible offer for SMG within six months “unless there is a material change of circumstances” or an event which UTV has specified in its withdrawal statement as an event which would enable the statement to be put aside.
In October, SMG saw its shares drop by 28% after issuing a profits warning. It blamed the dip in profits on a weak market for TV and cinema advertising (see SMG Issues Profit Warning And Sees Shares Fall).
In a turbulent month for the company, the board threatened to resign following a dispute with one of its main shareholders over who should run the company (see SMG Board Threatens To Resign).
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