Time Warner, Apax 'drop ITV takeover bid'

A group of investors has reportedly dropped plans to bid for ITV amid concerns about the hole in the broadcaster's pension fund.

American media giant Time Warner and private equity firm Apax Partners were said earlier this month to have considered forming a consortium for a £6.6bn takeover.

But according to the Financial Times, talks were abandoned due to the size of the deficit, which stood at £586m at the end of last year. This would have increased the total debt the group would have had to cover.

Shares in ITV have soared considerably on the back of takeover speculation, rising from 105p at the start of January to a peak of 130p in July. Shares fell 2.8% on Monday to 121.5p.

At the time of the talk about a possible takeover, it was reported that former BBC director-general Greg Dyke—an adviser to Apax—could have led a bid. Apax has refused to comment on the speculation.

ITV, which was created last year from the merger of Carlton Communications and Granada, recently unveiled a 57% rise in annual profits in its first full-year results as a unified company.

It said at the time that a combination of rising turnover and lower costs since the merger had contributed to the profits surge.

The group was boosted by industry regulator Ofcom's recent announcement that it was cutting the amount ITV pays for its licences to help it cope with the challenge of the digital age.

Ofcom is proposing to slash the cost of ITV's dozen licences, including GMTV, to less than £80m this year—down from the £215m paid in 2004.

Meanwhile, ITV has given assurances to Ofcom over its future handling of sports coverage after admitting it broke broadcasting rules by interrupting the finale of the Monaco Grand Prix with an ad break.

Ofcom said it had received 126 complaints about the timing of the break, taken with just three laps remaining. The regulator said: "ITV assured us that it understood the requirements of this rule and took very seriously the need to ensure that the quality of the viewing experience was maintained at the highest standards."

Lovelacemedia  |  19.07.2005

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