There is 'little, if any, strategic logic' to deal, says board

LONDON — ITV, Blighty’s biggest private terrestrial broadcaster, has formally rejected NTL’s offer to buy the company.

Following a board meeting held Monday — ITV issued a statement saying there was “little, if any, strategic logic” in the free-to-air web merging with the cable combo and that NTL’s offer undervalued ITV.

NTL’s bid involved offering 105 pence (199 cents) for each ITV share plus new NTL stock worth 17 pence (32 cents) at the close of business on Nov. 9.

On Friday BSkyB bought 17.9% of ITV at 135 pence (256 cents) a share.

In its statement ITV said “whereas there is obvious appeal to NTL in gaining control of ITV’s substantial and successful business, from ITV’s perspective there is little, if any, strategic logic for ITV to combine with NTL.

“The board feels unable to recommend to ITV’s shareholders that they should take NTL stock as part consideration for their ITV shares.

“The board is clear that the proposed offer materially undervalues ITV. For these reasons, the board of ITV cannot recommend the proposal to its shareholders and has accordingly rejected it.”

Meanwhile U.S. fund manager Fidelity, who sold ITV stock to BSkyB last week, has started to rebuild its stake in ITV, according to traders.

It has also emerged that the U.K. communications regulator, Ofcom, will examine if BSkyB’s stake in ITV represents a “change in control.”

An Ofcom spokesman said: “The Communications Act requires Ofcom to assess whether a change in shareholding has the effect of a change of control with reference to public-service broadcasting and the public interest.”

The 2003 Communications Act allows BSkyB to own up to 19.9% of ITV.

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