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Last Updated: Friday, 31 March 2006, 14:52 GMT 15:52 UK
Consortium abandons ITV takeover
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ITV has regularly been tipped as a takeover target
The private equity consortium bidding for control of commercial broadcaster ITV has abandoned its plans after its latest offer was rejected.

But it said it could return with a bid for ITV if a third party made an offer.

Earlier on Friday ITV spurned a revised bid from the consortium, which includes investment bank Goldman Sachs, Apax and The Blackstone Group, as too risky.

The consortium would have invested 1.3bn of their own money, but also saddled ITV with 3.5bn of debt.

Its latest offer would have given ITV shareholders 86p in cash on top of each share, or 130p in cash if they sold up.

'Risky' business

In a statement, ITV said that this level of borrowing would "be unduly risky for a business that operates in a cyclical environment and has high operational gearing".

It added: "This high level of debt would have enabled the consortium to buy, for less than 1.3bn, a 48% stake in a company which, immediately prior to the leak of the consortium's approach, had a market capitalisation of 4.8bn."

The company recently announced plans to return 300m to shareholders.

It has been the subject of repeated takeover speculation, largely because of the falling advertising revenues on its main channel, ITV1, which dropped by 50m in 2005.

But despite this fall, it recently announced results for 2005 that included a 42% rise in operating profit to 460m, as well as a halving of its pension deficit to 325m.

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