UTV Media PLC Proposed Sale of UTV Television for GBP100 million
October 19 2015 - 2:00AM
UK Regulatory
TIDMUTV
This announcement is not for release, publication or distribution directly or
indirectly, in whole or in part, into or from any jurisdiction where to do so
would constitute a violation of the relevant laws of such jurisdiction.
19 October 2015
UTV Media plc
("UTV" or the "Group")
Proposed Sale of UTV Television for GBP100 million
On 24 August 2015, UTV Media plc (LSE symbol: UTV), the provider of media,
television, news and radio broadcasting services, confirmed that it was in
discussions regarding a potential sale of its television assets. UTV today
announces that it has entered into a conditional agreement to sell the entire
issued share capital of UTV Limited and its wholly owned subsidiary UTV Ireland
Limited, which together comprise the whole of the television business of the
Group ("UTV Television") to ITV Broadcasting Limited ("ITV") for a cash
consideration of GBP100 million on a cash-free-debt-free basis, subject to an
agreed target working capital amount remaining in UTV Television at completion
of the sale (the "Sale"). The consideration paid at completion of the Sale
("Completion") will be subject to certain adjustments based on actual cash,
debt and working capital of UTV Television at Completion as determined through
a completion accounts process. As part of the Sale, the UTV defined benefit
pension scheme (the "UTV Pension Scheme") will remain with UTV Limited and
therefore UTV and its subsidiary undertakings following Completion (the
"Continuing Group") will cease to have liability to fund the UTV Pension Scheme
from Completion.
Highlights:
* Consideration of GBP100 million in cash recognises the value inherent in the
UTV Television business. Net proceeds after estimated tax, fees and
expenses are approximately GBP98 million.
* UTV Television consists of UTV Northern Ireland and the recently launched
UTV Ireland.
* For the year ended 31 December 2014, UTV Television had revenues of GBP34.7
million out of total revenues of the Group of GBP116.0 million, profit before
tax and finance costs of GBP5.5 million out of total profit before tax and
finance costs of the Group of GBP19.7 million (taking into account an
allocation of the central costs of the Group) and gross assets of GBP93.2
million as at 31 December 2014 out of total gross assets of the Group of GBP
231.0 million.
* For the six month period ending 30 June 2015, UTV Television had revenues
of GBP21.6 million out of total revenues of the Group of GBP58.3 million,
losses before tax and finance costs of GBP3.9 million out of total profit
before tax and finance costs of the Group of GBP2.7 million (taking into
account an allocation of the central costs of the Group) and gross assets
of GBP96.9 million as at 30 June 2015 out of total gross assets of the Group
of GBP222.5 million.
* As part of the Sale, the UTV Pension Scheme will remain with UTV Limited
and therefore the Continuing Group will cease to have liability to fund the
UTV Pension Scheme from Completion.As at 30 June 2015, the UTV Pension
Scheme had an IAS19 deficit of GBP3.2m and, based upon the scheme's actuarial
update, a deficit on a technical provisions basis of GBP9.6 million.
* The Sale will accelerate the delivery of value to shareholders of UTV
("Shareholders"). The Group's existing bank facilities will be repaid in
full and following Completion, the Continuing Group's borrowings under the
proposed new facilities will be kept to a net debt to EBITDA ratio of less
than two, which the directors of UTV (the "Board") considers to be an
appropriate level for a business of the size of the Continuing Group. The
Board proposes to return such amount of the net cash proceeds to
Shareholders as it considers appropriate at the relevant time, taking
account of the expected net proceeds from the Sale together with the
forecast operating cash flow of the Continuing Group, including associated
working capital and capital expenditure requirements. Further details of
the amount, method and timing of the return of cash will be set out in a
circular (the "Circular") which is expected to be posted to Shareholders as
soon as reasonably practical.
* The Sale will enable the Continuing Group to focus on opportunities within
radio and online.
* The Sale constitutes a Class 1 transaction for UTV under the listing rules
of the Financial Conduct Authority (the "Listing Rules") and is therefore
conditional upon the approval of Shareholders. The Sale is also conditional
upon obtaining the necessary regulatory approvals in the Republic of
Ireland.
* In connection with the Sale and conditional upon Completion and the
approval of Shareholders, the Continuing Group has agreed to cease using
the "UTV" name with effect from Completion. A resolution to change UTV's
name to a new name not containing the word "UTV" will be proposed at a
general meeting of Shareholders to be convened in due course prior to
Completion.
Commenting on the Sale, Richard Huntingford, Chairman of UTV said:
"The last few years have seen increasing consolidation in the global
television sector, creating media companies that span content, broadcast
and platform ownership. 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.
"I believe that the price reflects the inherent value within the UTV
Television business. ITV will be a good owner of the business and, with its
scale and reach, will be able to accelerate the future growth of the
business. I want to thank all the UTV Television staff for their
outstanding service to UTV over many years, and I wish them every success
in the future.
"As the UTV Pension Scheme will remain with UTV Limited, this removes any
future funding liability from the Continuing Group, and our Shareholders
will benefit from a significant return of cash. We plan to continue to
pursue our successful strategy in our radio businesses."
Enquiries:
UTV Media plc
Orla McKibbin, Director of Communications
Tel: +44 (0) 28 9026 2188
Numis Securities Limited (Joint Financial Adviser, Joint Broker and
Sponsor)
Nick Westlake
Lorna Tilbian
Chris Wilkinson
Paul Gillam
Tel: + 44 (0) 20 7260 1000
Goodbody Stockbrokers (Joint Financial Adviser and Joint Broker)
Kevin Keating
John Flynn
Siobhan Wall
Tel: +353 (0) 1 641 0600
This announcement has been issued by, and is the sole responsibility of,
UTV Media plc.
Cautionary Statement
Numis Securities Limited ("Numis") which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting exclusively
for UTV Media plc and no one else in connection with the Sale and will not
be responsible to anyone other than UTV Media plc (whether or not a
recipient of this document) for providing the protections afforded to its
clients or for giving advice in connection with the Sale, the contents of
this document or any of the transactions, arrangements or other matters
referred to or contained in this document.
Goodbody Stockbrokers ("Goodbody") which is authorised and regulated in the
Republic of Ireland by the Central Bank of Ireland, is acting exclusively
for UTV Media plc and no one else in connection with the Sale and will not
be responsible to anyone other than UTV Media plc (whether or not a
recipient of this document) for providing the protections afforded to its
clients or for giving advice in connection with the Sale, the contents of
this document or any of the transactions, arrangements or other matters
referred to or contained in this document.
END
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October 19, 2015 02:00 ET (06:00 GMT)
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