ITV to save millions by cutting number of US investors
LONDON – ITV is attempting to save millions of pounds by cutting the number of American investors with a share buyback, which will help it avoid costly US financial regulations.
The move is being seen as another sign of Europe reacting to strict new US Securities & Exchange Commission regulations and the Sarbanes-Oxley corporate governance legislation.
ITV is following in the footsteps of Lastminute.com and software firm Autonomy, which have made similar moves.
The buyback will cost ITV, which is not listed in the US, £3.5m but the outlay will represent a considerable saving. If it were to comply with the various regulations it would have to pay at least £7m during the next two years and £3m a year after that. The costs are imposed on all companies with more than 300 US investors regardless of whether they have a US listing or not.
ITV is offering a 15% premium on its shares and a one-off payment of $500 to investors with less than 175,000 shares in the broadcaster. Many of these investors were previously shareholders in Carlton Communications prior to its merger with Granada.
James Tibbitts, director of investor relations, said that ITV had held discussions with the SEC, which told the broadcaster no changes were expected before mid-2005.
"We need to act now because our filing obligation comes up in June. If we don't, then we will inevitably have to start spending that £4m very quickly," Tibbitts said.
Overall, ITV has around 1,000 US shareholders with some holding as few as 16 ITV shares.
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