Who has bucks to buy ITV?

Possible buyers lining up for network bid

LONDON — Just as the Competition Commission’s investigation into Carlton and Granada’s £2.7 billion ($4.4 billion) merger looks set to drag on until October, more would-be investors are starting to show an interest in the firms striving to consolidate Blighty’s dominant commercial web ITV.

The U.K. is waiting approval of the Communications Bill, which would open up the market to non-European investors who will be able to acquire ITV or rival broadcaster Five.

In the wake of Haim Saban’s failed attempt to secure German broadcast group ProSiebenSat 1, the U.S. billionaire now may have his sights set on ITV.

He has been linked to a consortium that could bid for either or both of the ITV shareholder companies. Alternatively, he could snap up the merged entity.

Private equity group Apax Partners is sniffing around Carlton and Granada and reportedly has held talks with Saban. Stephen Grabiner, the former chief exec of now defunct digital terrestrial venture ITV Digital, is heading Apax’s interest in ITV.

But a recent increase in the share price of both has put the brakes on the deal.

Saban Capital, based in L.A., has a financial base of $1 billion, but how much it would be willing to invest is far from clear. Carlton is valued at £937 million ($1.5 billion) and Granada has a market cap of $4.1 billion.

Industryites doubt he has the bucks to buy a merged ITV.

“I don’t believe Saban would get enough financing for the two companies together,” says one analyst. “He should have acted earlier when Carlton and Granada were unloved and struggling. There does seem to be a political will for the merger to succeed now.”

Saban is apparently keen to snap up bargains but has so far failed to land a major European asset. He also walked away from acquiring the Muppets from Germany’s EM.TV, allowing the Henson family to regain control of the children’s asset.

Apax has also approached Clive Hollick, boss of United Business Media, to buy back into the ITV network three years after selling the Meridian, Anglia and HTV franchises to Granada for $2.9 billion.

UBM, which also holds a 35% stake in terrestrial broadcaster Five, insists it has no plans to invest in other TV companies, describing Five as “non-core.” UBM’s main focus is business-to-business publishing in the U.S. and Europe.

Meanwhile, Five’s former CEO David Elstein is reportedly heading up a bidding consortium.

Other possible suitors for British assets could be Bertelsmann, the world’s fifth largest media group, although it is likely to concentrate on Five, in which it has a 65% stake.

Microsoft got its fingers burnt investing in U.K. cable operator Telewest, losing a whopping $2.5 billion, so it’s unlikely to be making other investments in Blighty anytime soon.

Rupert Murdoch’s News Corp. would not be able to bid for ITV because of restrictions in the Communications Bill on owners of 20% or more of the newspaper market. His News Intl. owns four newspapers including The Times and The Sun.

Viacom’s boss Sumner Redstone and AOL Time Warner chairman-CEO Richard Parson both expressed interest in the U.K. market but ruled out any immediate acquisitions last fall.

Disney has shown interest but execs in the U.S. are concerned about U.K. restrictions on regional programming.

With the merger between Carlton and Granada still under investigation and rising share prices putting off venture capitalists, any swoop for the commercial network is still some way off.

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