Microsoft 'mulls ITV Digital bid'

Just a few days left to find a buyer

Microsoft is considering launching a rescue bid for the cash-strapped broadcaster ITV Digital, reports say.

The software giant is one of several firms trying to assemble a consortium to take over the wreckage, according to the Observer newspaper.

The loss-making network, locked into a cripplingly expensive broadcast deal with the Football League, went into administration last month after failing to negotiate lower transmission fees.

A Microsoft spokeswoman refused to comment on the speculation.

But it is known that Microsoft is eager to enter the interactive television market, having already taken stakes in UK cable firms, NTL and Telewest.

Speculation about buyers

Culture secretary Tessa Jowell hinted on Friday that "new players" could save the broadcaster from being liquidated.

Deloitte & Touche, the administrators for ITV Digital, have enough money to keep the company going until early next week.

That has ensured that the coverage of the Football League play-offs is going ahead as planned over the weekend.

If a buyer for the company does not come forward in the next few days, ITV Digital is likely to be broken up and its assets sold off piecemeal.

Speculation about potential buyers has previously centered on European media giants such as Vivendi or Bertelesmann or on venture capitalist groups.

Deloitte & Touche are already offering the company's assets for sale but say they are still hopeful of finding a buyer for the business as a going concern.

Meetings will take place on Monday and Tuesday with an announcement to come as early as Wednesday.

Merger talks reopen

The situation could spell financial disaster for dozens of UK football clubs in England's First, Second and Third divisions, due for a slice of TV rights money.

The Football League, which oversees the divisions, is owed £178.5m by ITV Digital in TV rights.

The league has pledged to sue ITV Digital's owners, media firms Granada and Carlton, for the money, but there are fears some clubs could go under before any case was settled.

Meanwhile other Sunday press reports suggest that Granada and Carlton will reopen talks for a £5bn merger in order to placate shareholders for the money lost on ITV Digital.