Time Warner and ITV: Rumours Persist

12 July 2005

Following Time Warner's reported interest in Britain's largest commercial broadcaster ITV [WAMN: 04-July-05], rumour took deeper root over the weekend, according to Monday's The Guardian newspaper.

It seems TW head of entertainment and networks Jeff Bewkes has been having several heart-to-hearts with investment bank Goldman Sachs, also reportedly involved in the putative bid. Their discussions are said to centre on a joint 30% stake in the UK broadcaster - almost certainly large enough to secure effective control.

Interestingly, ITV's advisor, the investment bank UBS, declined to deny that a bid might be on the stocks. Citing ITV's £580 million ($1bn; €844m) pension deficit UBS, opted for diplomatic ambiguity with the statement that a bid is a "possibility rather than a probability".

But despite the Blair administration's deference to US media interests - News Corporation especially - it likely that any bid from US shores would be subject to the public interest 'plurality test' amendment.

This defensive trench was dug into in the 2003 Communications Act by filmmaker Lord David Putnam and others concerned with UK media independence.

The plurality test, although known colloquially as the "Murdoch clause", applies to all proposed large-scale media mergers and could be used to block any ITV takeover by Time Warner or others.

All of which might explain the involvement of UK private equity firm Apax Partners and its 'advisor' Greg Dyke, the former commercial broadcaster who became director general of the BBC before his resignation in 2003 in the wake of the Iraq 'intelligence dossier' debacle.

Dyke, a Briton well endowed with street-cred, would be a handy front for any US-funded bid, brandishing the Union Jack on TW's behalf to demonstrate its impeccably British credentials.

Data sourced from MediaGuardian.co.uk; additional content by WARC staff