ITV and NTL having open talks

DMC

Hmmm... its an interesting way of getting a CEO for ITV

There is more breaking news on http://media.guardian.co.uk/ , but neither party are denying it. The initial story is below.

http://media.guardian.co.uk/city/story/0,,1943537,00.html

ITV and NTL 'in merger talks'
1pm
Tara Conlan and Jason Deans
Thursday November 9, 2006
MediaGuardian.co.uk

ITV and Britain's biggest cable operator NTL Telewest are understood to be in discussions over a potential merger, MediaGuardian.co.uk can reveal.

Sources say a friendly takeover of the broadcaster by the cable giant - which yesterday announced it is to be rebranded as Virgin Media from early next year - could be made public as early as next week.

There has been speculation recently that a trade sale could be on the cards.

Ex-Ofcom chief executive Stephen Carter, formerly a managing director of NTL, would be the most likely candidate to head up ITV as its chief executive within the combined entity.

NTL already has ITV experience within its ranks in the shape of chief executive of content, Malcolm Wall, who joined the company this summer. He was also reportedly on the ITV board's long list of contenders for the chief executive job.

Elsewhere, there is also renewed speculation that former Channel 4 chief executive Michael Jackson has been talking to a private equity house about a bid for ITV.

RTL has also been linked with a bid for ITV, bringing the broadcaster under the same umbrella as Channel Five. But it is thought the pan-European broadcaster would bid with the backing of private equity houses.

It is thought that there is a difference of opinion within ITV's board over the direction the broadcaster should take.

The chairman, Sir Peter Burt, and some investors are said to favour a trade sale or private equity deal. The more traditional elements of the board, including Sir George Russell, are said to want to keep ITV independent.

Analysts have questioned how a private equity deal could work, unless ITV's share price fell below 90p - it is currently hovering around 106p.

They say a friendly takeover by NTL, involving a share swap, would make more financial sense.

It is not known how the deal would be structured. NTL's share price is stronger than ITV's, currently standing at just over $27 (around £14.20).

Experts also point to American content and distribution media models such as Time Warner and say combining NTL and ITV would be a strong market proposition.

One city source said: "Someone is sniffing around ITV for a trade sale. There is something going on. NTL is always interested in owning more content."

Another City insider said: "The question is where would it be floated?". NTL is listed on the Nasdaq in New York, whereas ITV is on the London Stock Exchange.

Investment giant Fidelity holds stakes in both companies - 14% of ITV and 6% of NTL.

Yesterday NTL announced widening losses and another fall in customer numbers. The group, which merged with Telewest in March and acquired Virgin Mobile in July, said the rebranded Virgin Media would launch early next year.

ITV declined to comment.

flogen

Jesus christ, NTL UK seems to be on a path of merging itself into total media dominance.
A merger would create an interesting rival to Sky I guess, although I doubt either side would rebrand itself to the other.

mike65

I can see why ITV might be interested but not NTL. Unless they simply view a merger (read takeover) as too good a deal to not make happen.

Mike.

byte

ITV to become Virgin TV! Hehe.

Intriguing, I must say. It will definitely be interesting to see how this all unfolds, or just folds.

icdg

Now correct me if I'm wrong, but is not the law in the UK post Communications Act 2003 still that Channel 3 licences can only be owned by European companies? NTL may be based in the UK, do all its business in the UK - for all intents and purposes be a British company - but its suffix is "Incorporated" and its registry is Delaware. That may be enough to stop it owning a Channel 3 licence.

I would guess in that case, the lawyers will be out, with a reverse takeover by ITV of NTL (I didn't think five years ago I would be saying that!) on the cards.

watty

I think further consolidation would be bad for viewers.
Also NETWORKS and content provison should be separate. Sky should not be allowed to operate platform AND provide channels.

Carriers / platforms should be program provider neutral. This was the logic of sell of of networks owned by terrestrial broadcasters and why RTENL is supposed to be sold by RTE.

watty

ITV doesn't want NTL/Telewest/Virgin running them.

http://www.theregister.co.uk/2006/11/21/itv_ntl_snub/
They don't want rebranded as a N.I.T.