UTV Media has reached conditional agreement with ITV Broadcasting for the sale of its television assets, UTV Ltd in Northern Ireland and its subsidiary in the Republic, UTV Ireland, for a cash consideration of £100 million.

The company said that net proceeds after estimated tax, fees and expenses are approximately £98m.

In 2014, UTV Television had revenues of £34.7m out of total group revenues £116.0m, and booked a profit before tax and finance costs of £5.5m.

For the six month period ending 30 June 2015, UTV Television had revenues of £21.6m and booked a loss of £3.9m.

UTV Media said that the sale proceeds will be used to repay in full existing bank facilities. In a statement the company added: “The board proposes to return such amount of the net cash proceeds to shareholders as it considers appropriate at the relevant time. Further details will be set out in a circular which is expected to be posted to Shareholders as soon as reasonably practical.”

In Association with

The proposed sale is conditional upon obtaining the necessary regulatory approvals in the Republic of Ireland. As part of the deal terms, UTV Media has agreed to change its corporate name, dropping the ‘UTV’ reference.

Shareholder Value

UTV chairman Richard Huntingford comented: “Having successfully extended the reach of our television business with the launch of UTV Ireland, I believe that shareholder value can be maximised through our television interests becoming part of ITV’s global broadcast and content business. We plan to continue to pursue our successful strategy in our radio businesses.”

CEO John McCann added: “As the Group has pursued its diversification strategy, the UK independent television sector has consolidated, with 12 of the original 15 regional broadcasters now under ITV's ownership.

“Increasing consolidation has been a feature of the television sector, creating media companies that span content, broadcast and platform ownership.

“The board is mindful of the further investments required to bring UTV Ireland to profitability and believes that the offer from ITV unlocks that value while reducing risk and enabling the continuing group to focus on opportunities within radio and online.”

UTV first went on air in 1959 as part of the ITV network and has held the Channel 3 public service broadcasting licence ever since. Based in Dublin, UTV Ireland went on-air on 1 January 2015.

The digital media businesses Simply Zesty and Tibus will not form part of the sale.

UTV has agreed to pay £10m into a retention account to cover warranty and tax indemnity claims if, within 7 years of completion, UTV disposes of the talkSPORT radio station. This obligation will not apply on a sale of UTV itself.

talkSPORT

In Britain, UTV’s radio assets consist of talkSPORT and 12 local radio stations, of which the majority are based in the north west of England.

talkSPORT, is part of a consortium with Arqiva and Bauer Media, which won the licence to operate the second national radio multiplex, D2. As part of the new services on that multiplex, talkSPORT will be launching three new national radio stations, talkRADIO, talkSPORT 2, and, under a 12 year licence agreement between Virgin Group and UTV, Virgin Radio.

“The successful launch of these three new digital stations will be a strategic priority for the Continuing Group,” said McCann.

Another strategic priority will be the development of talkSPORT International which currently provides football commentary in six languages in 52 territories around the world.

McCann said talkSPORT International will seek to further monetise its Premier League worldwide audio rights by expanding its geographic footprint, by broadening its broadcaster base and by creating attractive packages for sponsors and advertisers.

In Ireland, UTV is the largest local radio operator with seven stations broadcasting from Belfast, Dublin, Cork, Limerick and Drogheda and a national advertising sales house based in Dublin.

Completion of the deal is expected to occur during the first quarter of 2016.