UTV Media Plc has said it may sell its TV franchise.
The television company, based in Northern Ireland is one of only two independent broadcasters in the ITV network. News of a potential sale have led to shares increasing in value by around nine per cent.
On Saturday (August 22nd), the Belfast Telegraph reported that UTV was going to sell its television division to ITV in a multi-million pound deal.
However, UTV Media said in a statement: “Discussions are ongoing and may or may not result in such a transaction being agreed.”
In June, UTV Media predicted that UTV Ireland, its new Republic of Ireland channel would see full-year losses of £11.5 million – nearly double the £6 million loss that had been forecast in March. The channel has seen stagnant audience growth and analyst Alex Degroote from peel Hunt said that a sale could fetch between £100 million and £125 million.
According to data from Thomson Reuters, UTV’s television division, which operates in both Northern Ireland and the Republic of Ireland, accounted for 36 per cent of its revenue last year. The majority of the company’s revenue comes from radio.
“UTV is losing a lot of money in its Republic of Ireland TV business. That is putting the Plc balance sheet under a lot of strain. And therefore, we have been thinking for a little while that the company needed a solution to this problem,” explained Mr Degroot.
He added that UTV already has a close working relationship with ITV, since they share a lot of programming.
The Belfast Telegraph has said that a sale to ITV is expected to be confirmed this week. If the sale goes through, it would be the first time the channel would pass out of local control since it was set up as Ulster Television in 1958.
On Monday morning, ITV shares were down 1.9 per cent on the London Stock Exchange.
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