Beleaguered U.K. terrestrial broadcaster ITV and NTL, the Nasdaq-quoted British cabler that will rebrand as Virgin Media next year, are planning merger talks.
NTL said it has scheduled an “initial conversation” with ITV. “This is at a very preliminary stage, and there is no assurance that these discussions will lead to any offer being made for ITV,” NTL said in a statement.
An ITV spokeswoman confirmed NTL’s approach, adding, “The board of ITV has indicated its willingness to listen to any bona fide proposals.”
ITV’s share price climbed from £1.05 ($2) to $2.16 following NTL’s statement.
However, it is not apparent what both parties have to gain from a merger.
“The synergies are not obvious,” said a source. “ITV needs to sort out its program schedule and advertising business, while NTL is digesting the recent merger with Telewest and repositioning itself as a serious competitor to BSkyB in the pay TV, broadband and telephony businesses.”
Both combos are battling to adapt to a converged, digital world from positions that are hardly dominant.
ITV chief exec Charles Allen was forced to quit this summer following an underperforming stock performance and poor ratings for flagship web ITV1.
NTL, which earlier this year lost a bid for English premier league soccer rights, reported Wednesday increased losses and disappointing broadband take-up figures.