SMG and UTV merger talks end as Woodward named CEO
LONDON - The long-running on/off merger between and SMG and UTV has been called off after disagreement about the Scottish firm's pension liabilities as Rob Woodward, the former Channel 4 commercial director, is named chief executive.
Woodward is understood to have a turn around plan for Scottish Media Group and he has the support of City investment firm Hanover Investors Management, which last week increased its stake in SMG from 5.4% to 12.6%.
Chris Masters has also stepped down as chairman following the urging of Hanover Investors. Richard Findlay, the former chief executive of Scottish Radio Holdings, has been appointed as the new chairman in place of Masters. In addition, David Dunn, Steve Maine, Martyn Smith, MT Rainey and Tim Gardam have resigned with immediate effect from the board.
Woodward was most recently commercial director of Channel 4 and CEO of 4Ventures. Prior to that he was managing director of UBS Warburg and is a former managing partner of Deloitte’s European TMT business and UK strategy consulting practice.
Woodward said: "I've observed the business closely for some time and am delighted to have the opportunity to revive its fortunes. This business displays some unique assets, along with a wealth of creative talent. I very much look forward to unlocking its future potential, serving its audiences and participating fully in the digital world."
The talks ended followed disagreement about the level of SMG's pension liabilities. UTV said that while conducting due diligence it had identified concerns that included SMG's pension deficit. This resulted in UTV, which owns Northern Irish ITV franchise Ulster Television and TalkSport, wanting to review the terms of its original proposal or to withdraw its proposal.
Last month, SMG said it was to plug a £22m hole in its pension scheme by paying in around £3m a year over the next 10 years and asking members to raise their contributions by around 25%. The hole in its pension had been £40m at the start of 2006.
The announcement on its pension came after merger talks between the two started again in December when SMG, which owns ITV franchises Scottish Television, Grampian and Virgin Radio, said it had received another approach from UTV based on relative market values.
At that point, it suspended its search for a new chief executive to replace Andrew Flanagan, who left in July. The new talks between the two Celtic media groups come three months after SMG rejected UTV's last approach.
Separately, SMG reports that the processes continue for the disposals of Primesight and Pearl & Dean. Further announcements will be made in due course.
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