Britain’s ITV rejects consortium’s bid for controlling stake |

Britain’s ITV rejects consortium’s bid for controlling stake

LONDON – ITV PLC, Britain’s largest independent land-based broadcaster, said Wednesday it had rejected a bid from a private equity consortium for a controlling stake in the company.ITV said it turned down the bid from a the consortium comprising Apax Partners & Co. Ltd., the Blackstone Group and Goldman Sachs Group Inc.’s Principal Investment Area because the proposal would mean a large increase in the company’s debt.ITV and Goldman Sachs both declined to say how much the consortium had offered or how large a stake it sought, but The Daily Telegraph newspaper said in Wednesday’s editions that the consortium had offered to inject 1.5 billion pounds ($2.62 billion) to take effective control of ITV.Shares of ITV rose 9.4 percent to close at 128 pence ($2.24) on the London Stock Exchange.ITV has been battling to retain viewers and its share of advertising spending as digital channels mushroom and Britain prepares for the analog signal to be switched off.Reality music contest “The X-Factor” and longrunning soap “Coronation Street” continue to perform well for the broadcaster, but its other programming choices have been criticized.The company frequently has been mentioned as a takeover target because of a decline in advertising revenues at its flagship ITV1 channel.ITV Chief Executive Charles Allen said earlier this month that viewership declines at ITV1 cost the the broadcaster 50 million pounds ($87 million) in lost ad revenue last year. But after-tax profits were up 26 percent, as the company made progress in cutting costs and introducing new channels and revenue streams, including the purchase of Web site Friends Reunited.ITV said Wednesday it was concerned that shareholders who wanted to sell out of the new company structure would not be assured of receiving an appropriate premium for their stock.”The board therefore unanimously concluded that the proposal could not be in the best interests of all shareholders and accordingly rejected it,” it said in a statement to the London Stock Exchange.Leigh Webb, an analyst at Panmure Gordon, said the offer showed the ITV board it had to do more than the recent announcement of a 300 million pounds ($524 million) return of capital to shareholders.”One question we would ask is why the consortium wouldn’t want to take control of the entire group and take all the benefit for itself, unless it sees this as a way of getting control without paying the sort of premium that a total takeover bid would require,” he said.ITV was formed by the merger of Carlton and Granada in 2004.

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