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NTL finally ditches attempted ITV takeover bid

LONDON - NTL has walked away from its planned £5bn bid to take over ITV, after BSkyB's surprise swoop on the commercial broadcaster priced the cable operator out of the market.

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The cable giant NTL today confirmed that it had "no present intention" to bid for ITV because a deal would be "unlikely to be attained on terms acceptable to NTL".

It is understood that at a meeting yesterday, the NTL board decided to abandon its takeover plans because it could not match the 135p share price set by BSkyB's sudden acquisition of a 17.9% stake in ITV at the end of November.

By contrast, NTL only offered 105p a share in cash and a portion of NTL shares when it first approached the broadcaster at the start of November.

 

BSkyB paid £940m for its slice of the terrestrial broadcaster, in a move that was widely seen as a blocking tactic to foil NTL's bid by Rupert Murdoch's News Corporation, which owns 39% of BSkyB, headed by chief executive James Murdoch.

NTL said: "The fact that Sky would spend nearly $2bn to acquire its stake immediately following the mere announcement of NTL's proposed combination, before the ITV board had an opportunity to respond, highlights the magnitude of the competition issues involved."

The cable operator also said it had complained to media regulator Ofcom about BSkyB's buy-in, citing "serious competition and public interest issues".

Under City takeover code, NTL will not be able to make a formal approach to ITV for the next six months, unless BSkyB were to sell all or part of its share stake or the bid is backed by the ITV board.

This is unlikely to happen because ITV's board rejected NTL's cash and shares offer last month, saying that it undervalued the channel. It also said it could see "little, if any, strategic logic" in combining with NTL, although it could appreciate the "obvious appeal" of a deal to NTL.

In addition, James Murdoch has said that BSkyB plans to be a long-term investor in ITV, which could well preclude any other broadcaster, such as Five owner RTL, making a bid in the near future.

The news comes as ITV regains a stronger position in market due to the shock appointment of BBC chairman Michael Grade as its new executive chairman. During the summer, the channel was hit by poor ratings and destabilised by the absence of a permanent chief executive, following the departure of Charles Allen.

NTL said it would now be concentrating on its efforts on integrating its Telewest and Virgin Mobile businesses.

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