ITV rescue plan in sight?

chris

A Sunday newspaper said on Oct 5 that RTL, the Luxembourg-based media giant, is preparing a bid for ITV. The Observer said RTL has been given the go-ahead to mount a bid by its parent company Bertelsmann.

“The Mohn family, which controls Bertelsmann, is said to have set aside a £1bn-plus war chest for RTL head Gerhard Zeiler to use for European acquisitions,” said The Observer, adding that the shift in Bertelsmann's financial position comes about after it sold its 50% stake in music venture Sony BMG to Sony in August for more than £600m.

However, £600m, large as that sum is, is not sufficient to close a deal for the whole of ITV. ITV’s share price closed Friday at a bargain-basement 42.5p, giving the broadcaster a market capitalisation of £1.64bn. This time last year ITV was trading at three times that figure (£1.20 a share).

This doesn’t take into account debt, or the problems with ITV’s pension fund, said to have been a significant stumbling block for previous interested acquisition parties. ITV’s pension fund deficit is reported to be around £1bn.

BSkyB also currently owns 17.9% of ITV.



Source:RapidTVNews

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