Has cable TV operator NTL finally thrown in the towel in its #4.7 billion bid to gain control of broadcaster ITV – or is it merely biding its time before launching a new assault?
NTL, the UK's biggest cable TV firm, says it has "no present intention" of making a further move for ITV as long as rival British Sky Broadcasting retains its 17.9 per cent blocking stake.
But NTL added that it reserves the right to bid for ITV again if BSkyB sells all or part of its stake, which it hopes media industry regulator Ofcom will force the Rupert Murdoch-controlled company to do.
"NTL has submitted its views on this purchase to the Office of Fair Trading and OFCOM because it presents serious competition and public interest issues," NTL said in a statement to the London Stock Exchange.
"The fact that Sky would spend nearly $2 billion 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."
When it appointed Michael Grade executive chairman, ITV may have achieved a coup, but some observers believe the broadcaster is still a potential target.
Dresdner Kleinwort, for one, remains optimistic, telling its clients that although NTL has walked away for now, it believes some option value for a revived offer should continue to be included in the price. "
As a standalone, the realisation of value from the programme library and an audience turnaround will be a slow burn, but ITV, under Michael Grade, offers huge recovery potential," it offered as comfort to punters.
Overall, the broker said it continues to believe ITV is worth more under NTL ownership than as a standalone and feels that if NTL can buy at least 75 per cent of the company, it would be worth at least 155 pence to NTL.
On the opposite side of the coin Paul Richards, an analyst at London's Numis Securities, believes that it is highly unlikely that BSkyB will be forced by regulators to sell its stake in ITV. He views the chances of NTL coming back with another offer as "very slim."
"NTL has some big hurdles to overcome if it is to bid again,'' he added.
Nevertheless, NTL has already overcome some pretty big hurdles this year.
In March, the one time lame duck bought out rival cable operator Telewest. And, in May, it acquired Sir Richard Branson's Virgin Mobile Holdings for around #962 million. Sir Richard – as canny as ever – emerged as NTL's biggest shareholder following completion of that particular deal and then accused BSkyB of deliberately wrecking NTL's bid.
So what does NTL do for the time being?
Ostensibly, the company says it will focus on its recent acquisitions, in particular on its rebranding as Virgin Media in the first quarter of 2007.
That will occupy it for a few months, but after that, watch this space.
Branson and Murdoch be soon be at each other's throats again.
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