Third Time Lucky for UK TV Companies' Merger?

04 December 2006

BELFAST: Northern Ireland-based Ulster TV is for the third time this year sending red roses across the Irish sea to Scottish Media Group. Both are independent regional companies within ITV's UK-wide network.

In the wake of two failed attempts at merger - the second as recently as September - UTV approached SMG again late last week. The earlier talks collapsed after the latter insisted on a 52% stake in the merged entity, basing the demand on its [then] market capitalisation.

Hoewever, the intervening weeks have been unkind to SMG, whose share price has fallen sharply, reversing the stock imbalance in Ulster's favour. At close of business Friday SMG's market capitalisation was £186.49m ($369.14m; €277.21m) compared with £209.1m for its Northern Irish rival.

Although the UK Takeover Panel prohibits a renewed bid within six months of a previous attempt, the rule can be overridden by a favourable recommendation from the board of the target group - or a third party bid.

Data sourced from Financial Times Online; additional content by WARC staff