UTV plc has today written to the Board of SMG plc to confirm that it no longer intends to pursue its merger proposal with SMG. In reaching its decision, the board of UTV has taken into account the interim results of SMG announced on 13 September 2006 and the ongoing weakness in the advertising market faced by the ITV network.
As a consequence of this statement, the City Code on Takeovers and Mergers prohibits UTV from, inter alia, announcing an offer or possible offer for SMG within six months of today's date unless there is a material change of circumstances or there has occurred an event which UTV has specified in this statement as an event which would enable the statement to be put aside. Accordingly, UTV reserves the right to announce an offer or possible offer for SMG and/or to take any other action which would otherwise be restricted under Rule 2.8 of the City Code within six months of the date of this statement in the event that either:
(i) an agreement or recommendation from the board of SMG is forthcoming; or
(ii) there is an announcement by a third party of an offer (as defined in the City Code) for SMG; or
(iii) SMG announces a "whitewash" proposal (as described in Note 1 of the Notes on Dispensations from Rule 9) or a reverse takeover.