UTV Media PLC Proposed Sale of UTV Television for GBP100 million

 
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 02:16 ET (06:16 GMT)
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