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Further re Recent Approach

31st Mar 2006 09:42

ITV PLC31 March 2006 ITV plc ("ITV" or "the Company") Further statement in relation to recent approach In relation to the statement made on the 22nd March, 2006, the Board of ITVannounces that it has received a revised proposal from funds advised by oraffiliated with Apax Partners, The Blackstone Group and GS Capital Partners VFund, L.P. ("the Consortium"). The Board met yesterday and unanimously decidedto reject it. The key elements of the revised proposal were: * the Consortium would have made an offer for the whole of ITV's issued share capital * for each share currently held, ITV's shareholders would have been offered 86p in cash and 1 new share in the acquiring company * the Consortium intended to put in place an underwritten cash alternative to the new shares, of 44p per new share, so that shareholders who had wished to receive cash only in exchange for all or some of their current ITV shares would have received an aggregate of 130p for each share currently held * the offer would have been financed partly by the Consortium investing GBP 1.27bn in the acquiring company to receive 48% of its issued share capital; and partly by the acquiring company taking on GBP 3.5bn of debt * the proposal was conditional, inter alia, on due diligence; on receiving regulatory approval; and on reaching agreement with the Trustees of ITV's pension scheme Fundamentally, all of these key elements were unchanged from the Consortium'sprevious proposal, save that the underwritten cash alternative had beenincreased so that the cash price, for shareholders who would not have wished tohold shares in this highly leveraged company, was increased from 120p per share,in the original proposal, to 130p per share in the revised proposal. The Board gave careful and thorough consideration to this revised proposal anddecided to reject it principally for the following reasons: * at over 7 times 2005 EBITDA, the Board considered the proposed leverage to be unduly risky for a business that operates in a cyclical environment and has high operational gearing * this high level of debt would have enabled the Consortium to buy, for less than GBP 1.3bn, a 48% stake in a company which, immediately prior to the leak of the Consortium's approach, had a market capitalisation of GBP 4.8bn * the Board's concerns about leverage had previously led it to conclude that a guaranteed cash exit should be offered. Although the Board recognised that the Consortium had attempted to address this, the Board was strongly of the view that the level of the proposed cash exit did not compare favourably with the value that the Board believes can be achieved through the delivery of ITV's current plans * the Board did not believe that a cash price of 130p per share, representing a premium of just 11% to the price of ITV's shares immediately prior to the leak of the Consortium's approach, was at a level that adequately reflected the change of control inherent in the Consortium's proposal The Board therefore unanimously concluded that the revised offer was not capableof being recommended as being in the best interests of all shareholders. The Board will vigorously pursue its strategy for the Company's multi-platform,multi-channel digital future, which is demonstrably working and in which theBoard has the utmost confidence. In addition, the Board has recently announcedproposals to return an initial GBP 300 million of capital to ITV's shareholdersand is continuing to evaluate the optimal capital structure of the company. The following is stated in accordance with the rules of the Takeover Code: thisannouncement is not made with the Consortium's consent and there can be nocertainty that an offer will be made nor as to the terms on which any offermight be made. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the"Takeover Code"), if any person is, or becomes, "interested" (directly orindirectly) in 1% or more of any class of "relevant securities" of ITV all"dealings" in any "relevant securities" of that company (including by means ofan option in respect of, or a derivative referenced to, any such "relevantsecurities") must be publicly disclosed by no later than 3.30 pm (London time)on the London business day following the date of the relevant transaction. Thisrequirement will continue until the date on which any offer becomes, or isdeclared, unconditional as to acceptances, lapses or is otherwise withdrawn oron which the "offer period" otherwise ends. If two or more persons act togetherpursuant to an agreement or understanding, whether formal or informal, toacquire an "interest" in "relevant securities" of ITV, they will be deemed to bea single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Takeover Code, all "dealings" in"relevant securities" of ITV by ITV or any of the members of the private equityconsortium, or by any of their respective "associates", must be disclosed by nolater than 12.00 noon (London time) on the London business day following thedate of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Takeover Code, which can also befound on the Panel's website. If you are in any doubt as to whether or not youare required to disclose a "dealing" under Rule 8, you should consult the Panel. This information is provided by RNS The company news service from the London Stock Exchange

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