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Last updated: October 12, 2009 11:32 pm
ITV lurched deeper into crisis on Monday after its latest candidate for chairman pulled out of talks to take the post following consultations with major investors including its largest shareholder and business rival, British Sky Broadcasting.
Sir Michael Bishop, the airline entrepreneur behind BMI, was the board’s preferred candidate for chairman after his main rival, former Reed Elsevier chief executive Sir Crispin Davis, dropped out of the race last week.
Most recruiters said publicity surrounding the five-month search for the ITV chief executive had hampered progress and could have put off viable candidates.
ITV’s search identified Simon Fox, HMV chief executive, in July as the board’s preferred choice as chief executive, to work alongside Mr Grade as he moved to non-executive chairman. But almost as soon as Mr Fox’s name became public, he withdrew.
Sir Michael’s telephone discussions with BSkyB are sensitive, as the Rupert Murdoch-owned broadcaster has given undertakings to the government not to seek a seat on the board of ITV or exercise voting rights. BSkyB is ITV’s largest shareholder, with a 17.9 per cent stake.
A media lawyer said: “Speaking with Sir Michael Bishop is neither of those so I don’t think they are technically in breach of the wording of the undertakings.” BSkyB declined to confirm or deny that it had talked to Sir Michael.
Sir Michael told a surprised board of his decision after his conversations with ITV’s main investors convinced him that the chairman’s job was too complex for him to manage in the time he could devote to it, people with knowledge of the discussions said.
A spokesman for Sir Michael said that he took the decision “after conducting a thorough review of the position and its responsibilities”.
His decision was a further twist in one of the most tortured succession searches in UK corporate history, marked by discord between board and shareholders. Directors held an unscheduled board meeting on Monday to discuss their next move.
Shares in ITV gained as much as 6.8 per cent during the day after analysts suggested that the troubled broadcaster could attract a takeover bid, but settled back to close 2 per cent higher at 47.33p.
ITV also announced on Monday that John Cresswell, its chief operating officer, would act as interim chief executive as soon as a non-executive chairman was appointed, thereby replacing both of the roles occupied by Michael Grade, the executive chairman.
However, once a new chief executive is found, Mr Cresswell will leave ITV after 22 years.
The broadcaster has been involved in a five-month search for first a chief executive and later a chairman at the same time, leaving ITV in what headhunters describe as a “worst-case scenario”.
Last month, ITV offered the job of chief executive to Tony Ball, former chief executive of BSkyB, but could not agree terms.
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