ITV has demonstrated its lack of interest in acquisition activity with the sale of its 45 per cent stake in the Irish terrestrial broadcaster TV3.
The company will collect £70m for its holding after electing not to exercise its pre-emptive rights to purchase TV3 and selling out to the private equity group Doughty Hanson.
Analysts said buying TV3 may have made strategic sense for ITV as its shows such as Coronation Street make up some 60 per cent of the Irish channel's programming. They said the reluctance to buy it suggested ITV was unlikely to make an offer for SMG, the Scottish media company in which it is the largest shareholder. SMG is considered to be in play after the rival UTV made a merger proposal to it this month. SMG and UTV hold ITV franchise licences which ITV plc would like to own.
One analyst added that since ITV was, in effect, between chief executives, acquisitions were likely to be off the agenda. The chief executive, Charles Allen, steps down at the end of next month and the company is looking for a replacement.
ITV made a decent return on the TV3 stake, which it acquired for £29m in 2001. It has a programming agreement with TV3 which lasts until the end of 2007 and will ensure that it continues to make money from the broadcaster.
In May, Doughty Hanson had agreed to buy CanWest Global Communications's 45 per cent stake in TV3. Under the terms of the partnership, ITV had to match Doughty Hanson's offer or sell its own stake. The remaining investors in TV3, who include Paul McGuinness, the manager of the rock band U2, have also agreed to sell their stake to Doughty Hanson.
An ITV spokesman said: "The sale represents a further example of ITV's successful disposal programme of non-core assets which is now approaching £500m since the merger creating ITV plc in 2004."