UTV Media in talks to sell TV assets

<p>ITV has been tipped as potential buyer.</p>

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.”

Deeper-than-expected losses

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.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (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.