NTL, the cable broadcaster, on Wednesday abandoned its £4.7bn takeover bid for ITV, the UK’s leading commercial broadcaster, to concentrate on integrating this year’s merger with rival Telewest and acquisition of Virgin Mobile.
The decision by NTL not to raise its 122p a share offer for ITV follows last month’s decision by satellite broadcaster BSkyB to acquire a 17.9 per cent stake in the broadcaster.
“NTL announces that it has 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,” the cable group said on Wednesday.
The surprise move by BSkyB, which is owned by Rupert Murdoch’s News Corporation and run by Mr Murdoch’s son James, last month to pay £940m to become ITV’s largest shareholder halted NTL’s plans for a takeover.
The appointment of Michael Grade, former BBC chairman, as chief executive of ITV followed shortly after BSkyB’s decision to swoop for a stake in the broadcaster.
NTL said on Wednesday the decision by BSkyB to become ITV’s largest shareholder raised competition concerns.
“The fact that Sky would spend nearly $2bn to acquire its stake immediately following the mere announcement of NTL’s proposed combination, before the ITV board had an opportunity to respond, highlights the magnitude of the competition issues involved.”
NTL believes the large stake held by BSkyB will have a “material influence” over the future direction of the commercial broadcaster.
NTL has lodged its complaint with the Ofcom, the industry regulator, and the Office of Fair Trading.
NTL said it would now concentrate on completing the Telewest merger, which began in March of this year and enables the cable company to offer cable television, telephony and broadband services to 5m customers.
It will also focus on integrating Virgin Mobile, acquired in July, which adds mobile telephony to its cutstomer offer.
BSkyB’s acquisition of a sizeable stake in ITV to block NTL’s planned merger with the broadcaster sparked a war of words between Rupert Murdoch and Sir Richard Branson, NTL’s largest shareholder.
Sir Richard accused ITV’s board of “closing the door on NTL without even seeking to discuss the strategic merits of a combination”.
ITV later revealed that NTL had offered 105p a share in cash and stock worth another 17p on at the beginning of November, well below the 135p a share that BSkyB paid for its ITV stake.
ITV shares fell ¼p in morning trading in London to 112p.
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