ITV Rejects Second Bid By Defeated Dyke Consortium

ITV has rejected the second bid by Greg Dyke’s investment consortium, stating that the offer does not represent a good deal for current share holders. The consortium will not make a third approach, it confirmed this morning.

The revised bid was submitted to the ITV board last night, but met with unanimous rejection as the broadcaster’s management stated: “At over 7 times 2005 EBITDA, the board considered the proposed leverage to be unduly risky for a business that operates in a cyclical environment and has high operational gearing.”

In addition, ITV stated that “this high level of debt would have enabled the Consortium to buy, for less than GBP 1.3 billion, a 48% stake in a company which, immediately prior to the leak of the Consortium’s approach, had a market capitalisation of GBP 4.8 billion.”

The new offer gave share holders a cash alternative of 40p per share on top of the 86p in cash originally offered last week (see ITV Confirms But Rejects Takeover Approach).

Those wishing to offload their stake in the company would have received the additional payment, giving a total price of 126p per share – slightly above the company’s closing price of 125p last night.

The consortium, comprising Apax Partners, Blackstone and Goldman Sachs, had intended to install former BBC director general Greg Dyke in the top job at ITV, and had also mooted its intention to merge the company with Five (see ITV Bid Consortium Plots Merger With Five).

ITV: 020 7843 8000 www.itv.com