Ulster Television (UTV) has been linked to a possible £300 million (€439 million) bid for Scottish Media Group (SMG), the owner of Virgin Radio, Grampian, Scottish TV and advertising company Pearl & Dean.
UTV was close to bidding for SMG two years ago but exited the scene after the Scottish company's share rose too high. SMG's stock has been weaker of late, however, and has declined by 40 per cent since 2004.
A city of London source was quoted yesterday by the Observer newspaper as saying UTV's chief executive, John McCann, "could well have a go" if SMG's shares declined much further.
The Scottish group's chief executive, Andrew Flanagan, resigned last week under pressure from shareholders.
A move on SMG would add substantial scale to UTV's operations, giving it more strength to fend off any takeover bids that might be made in its direction in the future.
In 2004, Mr McCann played down the failed move on SMG and said it wasn't something the company needed to do. Since that point, UTV has grown through other acquisitions, most notably with last year's £97 million purchase of UK-based Wireless Group. This deal added to debt levels at UTV, with a purchase of SMG certain to swell borrowings further.
Earlier this year, UTV tried to seal the acquisition of TV3 but was beaten to this by private-equity group, Doughty Hanson. That deal, which is not yet complete, values TV3 at €265 million.
A spokeswoman for UTV declined to comment on the SMG speculation yesterday, saying that as a plc, the company would never comment on acquisitions.
SMG is 17 per cent-owned by ITV, the network that also owns 45 per cent of TV3 and needs to waive its pre-emption rights for the Doughty Hanson purchase to proceed. If UTV were to succeed in buying SMG, the company would be able to draw on significant synergies in its television and radio operations. As well as operating UTV, the Belfast-based group has 25 radio stations across the Republic and the UK.
