UTV Media is selling its television services to ITV for £100 million, and will continue to operate as a radio business under a new name.
The sale is subject to an agreed target working capital amount remaining in UTV Television at completion of the deal. Net proceeds after estimated tax, fees and expenses are approximately £98 million.
UTV says the sale will enable the continuing group to focus on opportunities within radio and online – and a name change to ‘a new name not containing the word “UTV” will be proposed at a general meeting of Shareholders’.
Richard Huntingford, Chairman of UTV said: “The last few years have seen increasing consolidation in the global television sector, creating media companies that span content, broadcast and platform ownership. Having successfully extended the reach of our television business with the launch of UTV Ireland, I believe that Shareholder value can be maximised through our television interests becoming part of ITV’s global broadcast and content business.
“I believe that the price reflects the inherent value within the UTV Television business. ITV will be a good owner of the business and, with its scale and reach, will be able to accelerate the future growth of the business. I want to thank all the UTV Television staff for their outstanding service to UTV over many years, and I wish them every success in the future.
“As the UTV Pension Scheme will remain with UTV Limited, this removes any future funding liability from the Continuing Group, and our Shareholders will benefit from a significant return of cash. We plan to continue to pursue our successful strategy in our radio businesses.”
For the year ended 31 December 2014, UTV Television had revenues of £34.7 million out of total revenues of the Group of £116.0 million, profit before tax and finance costs of £5.5 million out of total profit before tax and finance costs of the Group of £19.7 million (taking into account an allocation of the central costs of the Group) and gross assets of £93.2 million as at 31 December 2014 out of total gross assets of the Group of £231.0 million.
UTV operates 12 independent local radio stations in England and Wales, plus seven in Ireland and national UK station talkSPORT. The company is launching three more national radio stations next year.
Completion is expected to occur during the first quarter of 2016.