NTL scraps ITV takeover bid

Pa
Wednesday 06 December 2006 11:47 GMT
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Cable operator NTL said today that it had abandoned its £4.7 billion bid for ITV.

The company told the stock market it had "no present intention" of making an offer for the broadcaster and said it was unlikely to strike a deal "on terms acceptable to NTL".

ITV had already said there was "little, if any, strategic logic" for a tie-up with NTL. Its decision came after BSkyB bought a 17.9% stake in ITV.

NTL said it would now continue to focus on integrating its cable operation with its Telewest and Virgin Mobile divisions instead. The company is due to rebrand as Virgin Media next year.

ITV entered talks with NTL last month after the cable company approached the commercial broadcaster over a possible merger.

The proposal had the backing of Sir Richard Branson, who became NTL's largest shareholder when NTL bought Virgin Mobile earlier in the year.

Analysts had looked for a deal between NTL and ITV to pit Sir Richard against Rupert Murdoch and BSkyB in a battle for television ratings.

But BSkyB incensed Sir Richard when it snapped up a 17.9% stake in ITV for £940 million, a move which seemingly scuppered the chances of NTL entering the fray.

Sir Richard branded the move a "blatant attempt to distort competition" and called for regulators to launch an investigation into BSkyB's actions.

NTL said in a statement today: "NTL has submitted its views on the purchase to the Office of Fair Trading and Ofcom because it presents serious competition and public interest issues.

"The fact that Sky would spend nearly two billion US dollars to acquire its stake immediately following the mere announcement of NTL's proposed combination - before the ITV board had an opportunity to respond - highlights the magnitude of the competition issues involved."

It had been thought NTL may consider upping its bid for ITV, after the broadcaster said the offer "materially undervalued" the firm. But today's statement seems to have put a potential bid on the back burner.

Last week, BBC chairman Michael Grade shocked the media industry by becoming executive chairman at ITV - a move described as a coup for the channel and its investors.

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