UTV Media agrees to £100m deal with ITV

<p>The company has operated in Northern Ireland since 1959.</p>

UTV Media has agreed to sell its television stations and brand to ITV in a £100 million deal.

The company operated the first commercial television channel in Ireland and has been in operation since 1959.

Although most of UTV's channels are for Northern Ireland, the company launched a station in the Republic of Ireland in January. However, the Dublin station has had difficulty finding an audience an is expected to lose around £12 million this year.

The deal was confirmed on Monday and excludes UTV Media's radio businesses UTV Radio GB and UTV Radio Ireland. ​Its digital media businesses, Simply Zest and Tibus Digital are also not part of the agreement.

ITV says it has no plans to change the on-air branding – so the channels will still be known as UTV.

A "good owner"

Commenting on the sale, chairman of UTV Richard Huntingford said that ITV would be a good owner of the business. He explained that UTV plans to continue to "pursue a successful strategy" in the radio business, which account for about 60 per cent of the company's revenue.

Mr Huntingford also noted that ITV's "scale and reach" would help accelerate growth of the company and he expects shareholder value to increase due following the sale.

UTV currently broadcasts many of Northern Ireland's most popular television programmes. In August, the company reported half-year profits of £1 million and turnover of £58.3 million. In comparison, the firm saw profits of £10 million for the same period in 2014.

The deal is still pending approval from UK and Irish broadcasting regulators. Ireland's competition watchdog will also need to give the deal the green light before going ahead.

ITV's chief executive Adam Crozier said that the two companies have a "long-standing relationship", adding that they have strategic objectives that are closely aligned.

"We are very pleased that they are joining the ITV family," he added.

Once the deal is completed, ITV will own 13 of the 15 regional licences for the channel three network.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.