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NTL reveals ITV merger interest | NTL reveals ITV merger interest |
(about 1 hour later) | |
NTL has confirmed it has approached UK commercial broadcaster ITV about a possible merger of the companies. | NTL has confirmed it has approached UK commercial broadcaster ITV about a possible merger of the companies. |
The firm says it has "scheduled an initial conversation" with ITV. | The firm says it has "scheduled an initial conversation" with ITV. |
NTL said the process was at a very preliminary stage and there was no assurance that these discussions would lead to any offer being made for ITV. | NTL said the process was at a very preliminary stage and there was no assurance that these discussions would lead to any offer being made for ITV. |
ITV said a "highly tentative expression of interest" about holding talks had been received from NTL, but no meeting had yet been held or proposal received. | ITV said a "highly tentative expression of interest" about holding talks had been received from NTL, but no meeting had yet been held or proposal received. |
However, it expressed a "willingness to listen to any bona fide proposal". | However, it expressed a "willingness to listen to any bona fide proposal". |
Shares in ITV, which has been hit by a decline in advertising revenue, were ahead by 6% at 112 pence in afternoon trade. | Shares in ITV, which has been hit by a decline in advertising revenue, were ahead by 6% at 112 pence in afternoon trade. |
ITV's market capitalisation is about £4.1bn ($7.8bn), and NTL's is about £4.68bn ($8.9bn). | ITV's market capitalisation is about £4.1bn ($7.8bn), and NTL's is about £4.68bn ($8.9bn). |
Rebranding | Rebranding |
ITV is currently in the process of drawing up a shortlist of possible candidates to take over as its new chief executive. | ITV is currently in the process of drawing up a shortlist of possible candidates to take over as its new chief executive. |
The broadcaster was a bid target earlier this year, but former chief executive Charles Allen rejected an approach from a consortium of private equity firms. The investors had wanted to replace him with Greg Dyke. | The broadcaster was a bid target earlier this year, but former chief executive Charles Allen rejected an approach from a consortium of private equity firms. The investors had wanted to replace him with Greg Dyke. |
Adding content to their (NTL's) platform of services will put them in a powerful position and more of a rival to the likes of BSkyB Henk Potts, Barclays Wealth Check ITV's share price Check NTLs' share price | |
ITV is obliged to consider the approach, but has not yet been given basic information on what NTL is prepared to offer, how it will finance any offer and whether a bid would be in cash, shares or a mixture of both. | ITV is obliged to consider the approach, but has not yet been given basic information on what NTL is prepared to offer, how it will finance any offer and whether a bid would be in cash, shares or a mixture of both. |
In September, NTL, which plans to rebrand itself under the Virgin name in 2007, unveiled a package which bundles together TV, high-speed internet, and fixed-line and mobile phone services. | In September, NTL, which plans to rebrand itself under the Virgin name in 2007, unveiled a package which bundles together TV, high-speed internet, and fixed-line and mobile phone services. |
NTL is the dominant provider of cable TV services in the UK, having merged with Telewest. | NTL is the dominant provider of cable TV services in the UK, having merged with Telewest. |
Sir Richard Branson is NTL's biggest shareholder, after its £960m acquisition of Virgin Mobile. | Sir Richard Branson is NTL's biggest shareholder, after its £960m acquisition of Virgin Mobile. |
Debt issue | |
In May, NTL revealed that it had debts of £5.4bn, at the same time as it announced plans to cut or outsource 6,000 jobs by the end of 2007. | In May, NTL revealed that it had debts of £5.4bn, at the same time as it announced plans to cut or outsource 6,000 jobs by the end of 2007. |
Its large debts could be an obstacle to any merger. | Its large debts could be an obstacle to any merger. |
Henk Potts, equity analyst at Barclays Wealth, said ITV's lack of a chief executive may have been behind the timing of the NTL approach. | |
And he said a tie-up with ITV made sense for NTL's hopes of becoming a major media player. | |
Mr Potts said: "Adding content to their platform of services will put them in a powerful position and more of a rival to the likes of BSkyB." |