ITV Board Rejects NTL Merger Bid
The ITV board has unanimously rejected a merger bid by NTL, claiming there is “little, if any, strategic logic for ITV to combine with NTL “.
For each ITV share, the US cable giant had offered 105p in cash and new NTL shares, which were worth 17p at the close of business on 9 November. The new shares would make up around 12.5% of the enlarged company.
The ITV board, which met yesterday to consider the offer, said the offer “materially undervalues ITV”.
ITV said there would be no guaranteed cash alternative to the share element of an offer. It added that the number of shares that would comprise the paper element of the offer would be fixed, so the value of the proposal would fluctuate as a result of movement in NTL’s share price.
“The board believes that whereas there is obvious appeal to NTL in gaining control of ITV’s substantial and successful business, from ITV’s perspective there is little, if any, strategic logic for ITV to combine with NTL,” ITV said in a statement.
The offer had been “thoroughly analysed by ITV’s advisers” and given “detailed and careful consideration”, the broadcaster added.
This latest update in the unfolding drama comes as the Office Of Fair Trading has said it may not investigate BSkyB’s acquisition of almost 18% of ITV, despite calls from rival NTL that the deal was anti-competitive.
The OFT said that it did not believe that there was enough information to suggest that a merger situation has arisen at this stage. However, the authority’s announcement does not mark a final decision and the body may readdress the topic in the near future.
Broadcasting regulator Ofcom met yesterday to discuss whether the almost £1 billion investment by Sky in Britain’s biggest commercial broadcaster breached change of control restrictions (see Ofcom To Discuss BSkyB’s ITV Acquisition).
The watchdog will examine whether a change of control has taken place at ITV. However, the process, which could lead to a more rigorous investigation, is likely to remain unresolved for weeks.
NTL’s chief executive, Steven Burch, has said that Sky’s move was anti-competitive, accusing the satellite broadcaster of wanting to have an unreasonable and unfair grip on media in the UK. Sir Richard Branson, a 10.5% shareholder in NTL, also attacked Sky for the same reasons (see Branson Bites Back At Sky’s Swoop On ITV).
NTL: 01256 752000 www.ntl.com ITV: 020 7843 8000 www.itv.com