The bid consortium led by Greg Dyke is putting together an amended investment proposal for ITV. The consortium, comprising Apax Partners, Goldman Sachs and Blackstone Group, is putting together a new proposal that would involve the underwriting of an extra £1.3bn (US$2.26bn) of new ITV shares to provide an exit alternative for current shareholders.
IFR Buyouts Europe understands that the consortium is working to present the alternative proposal to the listed UK television broadcaster’s board ahead of this coming weekend.
Blackstone Group, the US private equity firm, was thought to have been anxious at the hostile reception to the consortium’s initial offer, although its worries are believed to have been alleviated. The amended offer is an attempt to get the ITV board onside.
The ITV board rejected the consortium’s initial approach, which would have involved adding a further £3.5bn (US$6.1bn) of debt to ITV’s books, with an 86p per share return of cash to shareholders.
The consortium is offering £1.3bn (US$2.3bn) to take a 48% stake in ITV. It plans to present the first proposal again, with the added cash option for investors. ITV shareholders had informed the consortium that they would not back a full bid for ITV without a substantial bid premium.
ITV has begun a series of meetings with investors to explain the rationale behind its rejection of the consortium’s initial offer. Fidelity, ITV’s largest shareholder, is reported to be “interested” in the consortium’s offer and to have indicated that it might like the principle of holding equity stubs.
Sources at ITV said that the broadcaster had not yet been contacted by the consortium to discuss any amended proposals. ITV believes the stubs would be a risky investment given its level of operational gearing, and the business’s cyclicality.
Henry Gibbon
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