Debt cleared as HTV links with Flextech
The deal will connect a traditional terrestrial broadcaster and a cable and satellite television company in a pattern that may be followed by other groups.
Flextech is paying pounds 27m in cash for 17.3 million new HTV shares, a 20 per cent stake. It is raising the necessary funds through a placing and open offer of 6.6 million new ordinary Flextech shares at 415p.
The agreement, which is subject to shareholder approval, equates to 156p per HTV share, a premium of 25 per cent over Wednesday's price.
Flextech, 60 per cent owned by the US cable giant Tele-Communications Inc, is prevented by its non- EU parentage and by its own satellite interests from acquiring a bigger stake in the ITV franchisee.
Chris Rowlands, HTV's chief executive, said the deal was a tremendous opportunity for both companies. 'We will make programmes for Flextech and provide services for them which at the moment they have to buy in,' he added.
The price is 32.5 times HTV's 1993 earnings. Flextech runs 11 cable or satellite channels broadcasting to the UK and Europe, five of them in the Sky Multi Channel package. There are a number of areas of overlap between HTV's programming expertise and Flextech channels, particularly in children's programming and natural history documentaries.
HTV returned to profit in 1993. It made pre-tax profits of pounds 3.3m ( pounds 20.5m loss) on turnover down to pounds 124.9m ( pounds 134.3m). There will be a final dividend of 1p (nil). The shares rose 25p to 152p.
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