ITV to raise £600m by kicking non-core assets into touch

Click to follow
The Independent Online

Charles Allen, the chief executive of ITV, has earmarked £600m worth of non-core businesses which he is looking to sell. These range from Carlton Screen Advertising, which sells adverts shown at cinemas, to stakes in top Premier League football teams Arsenal and Liverpool.

Charles Allen, the chief executive of ITV, has earmarked £600m worth of non-core businesses which he is looking to sell. These range from Carlton Screen Advertising, which sells adverts shown at cinemas, to stakes in top Premier League football teams Arsenal and Liverpool.

ITV, which was formed by the merger of Granada and Carlton Communications, confirmed that Mr Allen had started a review of the businesses but said he was in no hurry to sell them. "Some of these operations need to be a bit more intensively managed before they can be sold off," said a senior source.

According to a note published last week by Investec Securities, the value of these operations could exceed £600m.

The jewel in the crown is a 5 per cent stake in Thomson, the French multimedia group which bought the video copying business Technicolor from Carlton. The stake is valued at £185m.

ITV owns stakes in three other quoted companies: the Scottish TV group SMG and two Australian groups, Seven Network and Village Roadshow. Mr Allen may be tempted to hold on to the SMG stake because of the potential for the company to become a takeover target.

ITV has stakes in three TV ventures. The most valuable is its joint venture with BSkyB, GSkyB. This runs channels such as Granada Men & Motors, which serves up a diet of soft porn and motoring. ITV's stake is valued at £25m. It also owns 45 per cent of Irish TV channel TV 3 and 33 per cent of MUTV, the digital service dedicated to Manchester United.

Ironically, the company also owns stakes in two of Manchester United's fiercest rivals. It has 10 per cent of Liverpool and 5 per cent of current Premiership champions Arsenal. These are valued at £18m, a fraction of what was paid for them.

On top of this, ITV owns a mix of businesses, mostly acquired by Michael Green, the former Carlton chief executive who was unceremoniously ousted from the group ahead of the merger at the behest of its largest shareholders.

These include a book publisher, which is believed to be already up for sale, the outside broadcast company Carlton 021, some advertising sales operations and an education business.

Selling all the operations would wipe out ITV's net debt of £550m. It is expected to reveal shortly that its digital channel, ITV2, has moved into profit. This will provide a platform for the launch of a new channel, ITV3, this autumn.

Mr Allen is also confident of securing a better deal from the Government on the fees that ITV pays for transmitting its main channel. ITV paid £217m in regulator costs last year and is hoping to reduce this by more than £75m.

Comments