The private equity consortium stalking ITV may abandon its bid this week if a proposed cash sweetener fails to win over investors in Britain's biggest commercial broadcaster, it was claimed yesterday.
Apax Partners, the Blackstone Group and the Investment arm of Goldman Sachs, were understood to be working on a new offer, which for the first time will include a cash alternative. However, unless they can secure a recommendation from the broadcaster's board, headed by chief executive Charles Allen, they will walk away, The Sunday Times reported.
It is understood the trio plan to install Greg Dyke, the former BBC director-general, as chief executive to replace Mr Allen. But there are signs of tension in the consortium that may threaten its chances of success, with Blackstone thought to have been unhappy at the nature of the approach, the paper reports.
It is understood the terms of the new offer were certain to include a cash alternative for shareholders at a premium to ITV's closing share price on Friday of 12734p.
A separate report in the Observer suggested that Mr Allen could be axed as ITV's boss if he fails to convince shareholders this week that his strategy for the struggling media company is working.
ITV rejected an approach on Wednesday saying it was not in the interests of all shareholders. Its board had exam-ined the proposal to inject £1.3 billion of equity in return for 48 per cent of the company but feared that shareholders who did not wish to retain its shares would not have been able to gain an appropriate premium if they sold out.
Shares in ITV surged by more than 10 per cent following confirmation of the bid, and the stock was traded four times more heavily than any others on the FTSE 100 Index.
ITV, which was formed by the merger of Carlton and Granada in 2004, is currently battling to retain viewers and its share of the advertising spending pot as digital channels mushroom and the nation prepares for the analogue signal to be switched off.
It has frequently been tipped in the City as a takeover target and reports last year said American media giant Time Warner was also working with the private equity firms on a possible bid.