NTL Drops ITV Bid On Rejection

NTL has dropped plans to bid for ITV after its £4.7bn proposal was rejected by the broadcaster.
As expected by industry analysts rival BSkyB has swooped to take a blocking stake in ITV. According to news sources the decision has been welcomed by major shareholders in the cable group, who are keen for NTL to focus on its recent acquisitions.
In a statement NTL said that it had "no present intention of making an offer for ITV, as it believes a transaction between ITV and NTL is unlikely to be attained on terms acceptable to NTL."
Many in the industry have questioned the coupling of the two giants, one reason being ITV's history of being a free to view channel and NTL's as a subscription service.
NTL said last month that it was prepared to make a cash and shares bid for ITV worth 122 pence a share at November 9 prices. However ITV rejected the proposal from NTL as one with "little strategic logic."
NTL's plans were scuppered when BSkyB swooped to take a 17.9% stake in ITV at 135 pence a share.
NTL's shareholder Richard Branson has complained about BSkyB's move to Britain's Office of Fair Trading and to media regulator Ofcom. Sir Richard described BSkyB's move as: "a blatant atttempt to distort competition even further by blocking any attempt to create a strong and meaningful competitor."
In a statement, Sir Richard said that BSkyB's move was a breach of competition laws and called on the OFT to intervene.
Industry analysts have said that it is likely to take months for regulators to make a decision and BSkyB has said it is confident its stake does not break any competition rules.
ITV has suffered a drop in audiences and advertising revenues amid growing competition from digital channels. The appointment of former BBC Chairman Michael Grade has been seen as a boost by the broadcaster.
NTL has said that it will continue to focus on integrating NTL, Telewest and Virgin mobile. The company will be rebranded in 2007 following its recent purchase of Richard Branson's Virgin Mobile group.
(DS)