Sharewatch Focus: United Business Media
When United Business Media last week announced an 11.4% rise in headline profit during 2000 (see UBM Shares Surge On Strong Profit), the company reporting was almost completely unrecognisable, even in name, from this time last year. United has chosen its way forward and begun the new millennium making certain it is on track.
The new century began with plans for a merger with Carlton (see Carlton And United News & Media Set For £7.8bn Merger) made complicated by Granada’s “if you can’t beat ’em, merge with ’em” counter attack (see Granada Poised To Bid For Rivals). United was tipped even then as the most likely partner if Granada’s plans were successful (see Market Backs Carlton As Most Likely Target For Granada).
In February both proposals were referred to the Competition Commission (see Granada Referred To The Competition Commission) and as the quarter wore on and speculation about the formation of a unified ITV hotted up, United News & Media shares began to climb from their uncertain position around the £8 mark towards £9 and more.
At the end of February came a taste of the future for United, as a £370m internet investment plan was revealed (see UNM To Plough £370m Into Internet Investments), with £270m earmarked for UK projects. This was still the time of the dotcom bubble and United joined Reed Elsevier and Scottish Media in backing an online future. The future also looked bright for Channel 5, in which United had a 35% stake thanks to Warburg Pincus’ decision to sell earlier in the year (see Warburg Pincus Sells Channel 5 Stake To Shareholders), but full year results showed that the fledgling terrestrial channel was doing well. Investors were encouraged, and shares in United boosted.
The suspense over the first hurdle in the ITV consolidation process – the verdict of the Competition Commission – was meant to end on 16 May, but during March the Commission announced that it was extending the deadline to 16 June (see Competition Commission Extends Deadline To Report On Carlton/UNM). During May United nevertheless continued the process of divestment necessary if a merger went ahead, with the sale of UAP Inc to Trader Publishing (see UNM Continues Divestment With UAP Sell-Off), bringing the total revenue from the divestment programme to $840m.
As the end of the second quarter came and went, United shares, which had dipped in April, began to climb again, as, with the ITC declaring that an ITV merger passed the public interest test (see ITC Says Proposed Mergers Pass Public Interest Test) and the Competition Commission gave its blessing (see ITV Merger Ruling Abolishes 25% Advertising Revenue Limit), effectively abolishing the 25% limit on NAR ownership, a resolution to the merger question seemed imminent. At the same time, United spoke with confidence about its expectations of online profit within four years (see UNM Online Promises To Net Profits Within Four Years) and reported increased revenues in a trading update (see United Reports Increased Revenue As It Awaits Regulatory Outcome).
July saw the original Carlton/United merger plans crumble (see United “In Talks” As Deal Collapses) and both parties vie for Granada’s favour, not wishing to be left out of the final deal. United completed its divestment with the £360m sale of Miller Freeman to Reed Elsevier (see United Completes Divestment As Rivals Prepare For Carve-Up) and a day later the future of ITV was sealed as Granada went ahead with a deal to buy up United’s TV interests (see Future Of ITV Laid Out As Granada Seals Deal) at the end of a week which saw United shares reach their highest price of the year, £9.90.
Steady pre-tax profits for the half year, coupled with increased headline profits and group turnover (see Granada Merger To Strengthen United Balance Sheet) pointed towards year-end results strengthened by the merger deal. Shortly afterwards, United made moves to strengthen its business-to-business portfolio with the £6m acquisition of Healthcare Data, an information services provider for the health industry (see United News & Media Strengthens B2B Portfolio).
Shares dipped towards the end of the third quarter, as shareholders gave their approval to the Granada deal (see United Shareholders Approve Granada Merger), but began to pick up again as the end of the year approached and a the business’s new name and direction was outlined (see United Proposes Name Change As Future Growth Plans Announced). The newly named United Business Media was to build on its core businesses, CMP and PR Newswire, “through a combination of organic growth, investment, partnership and acquisition.” A final divestment, of portal and ISP Line One (see United And BT Agree To Sell LineOne) which it owned jointly with BT, meant United Business Media began the new year with a new look that appears to go deeper than just its name.
United Business Media: 020 7921 5000 www.unitedbusinessmedia.co.uk
UK media shares are monitored and listed daily in MediaTel Newsline’s Sharewatch