ITV is fending off a £1.5bn raid led by Goldman Sachs, Apax Partners and Blackstone, a deal that would see shareholders get a huge payout, funded by raising the company's debt levels. ITV has tried to present the offer as too low and far too risky.
Some in the City noted yesterday it is unfortunate that Sir Peter is also the chairman of Promethean, a takeover vehicle founded by his son, Michael. Promethean aims to take control of large listed companies, especially media and finance groups, while leaving most of the equity with existing shareholders. Michael Burt said last year: "Clearly, we're very big fans of this sort of approach."
Sir Peter was an adviser to Apax, in what would have been a clear conflict of interest until last year. He declined to discuss Promethean yesterday.
There is concern in the City at what the effect of the private-equity bid would be on the balance sheet. Fitch Ratings said: "It is highly unlikely that ITV's bonds would be investment grade after this." ITV's credit rating is a respectable BBB, but Standard & Poor's has warned it may cut this because of the pressure on the board to improve shareholder returns even if the bid fails.
ITV's management will embark on a tour of investors next week. Crucially, it must get Fidelity, which has a 13.9 per cent stake, on its side. Fidelity famously forced out Michael Green on the eve of the Carlton-Granada merger that formed ITV.
The consortium is offering to buy £1.5bn in new ITV shares, then return £3.5bn to investors, in a deal that would give it 48 per cent of the new, highly leveraged, company. ITV shares closed up 1.75p at 1,27.75p, valuing it at £5.3bn.
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