Grade said to be mulling SDN sale

ITV chief also eyes selling social network

LONDON -- ITV may be forced to sell some of its crown jewels in a bid to cut costs as its share price slides to new lows.

A swirl of media reports here Monday suggested that executive chairman Michael Grade is considering the sale of SDN, its digital television channel operator, in a bid to raise about 150 million pounds ($217 million.)

He also is looking at selling the company's failing online social networking business Friends Reunited, which has lost ground to such ventures as Facebook and MySpace.

Grade will have to address market concerns about the broadcaster when it publishes its results March 4.

Shares in the company fell to 23.5 pence Monday (34 cents), close to last week's all-time low of 23.25 pence, valuing the British broadcaster at just over 1 billion pounds ($1.4 billion). A year ago, shares stood at 73 pence.

With pension liabilities of more than 2.6 billion pounds ($3.8 billion) and an urgent need to cut further costs ITV is thought to also be likely to cut its dividend.

Analysts forecast that the commercial broadcaster will be running a 150 million pounds ($217 million)-a-year deficit by 2011, but believe that the business still has value.

"ITV still has a strong franchise -- the key issue is that its debt and pension obligations are too onerous given the severity of the economic downturn," UBS analyst Daniel Kerven said.
comments powered by Disqus