Bertelsmann signals RTL sale fuelling talk of ITV purchase

Bertelsmann, Europe's largest media group, has indicated it could sell 15% of RTL, the European TV group, fuelling speculation it will use the money to finance the acquisition of ITV.

Luxembourg-based RTL, which owns Five in the UK, has a market capitalisation of €10bn. This means the group could raise €1.5bn from the sale to mount a bid for ITV, which is worth €2bn.

Hartmut Ostrowksi, the chief executive of Bertelsmann, said he also could forsee "further expanding" RTL's production company Fremantle, which competes with ITV in the area of TV production.

But Ostrowksi, who has been busy in the process of trimming the group's activities, also said he felt "no pressure" to make a big move soon.

He recently completed the sale of a half share in Sony BMG to Sony, which taken together with this latest move suggests that Ostrowski is preparing a significant acquisition by the group, but there are alternatives to ITV.

These could include Central and European Media Enterprises, which has caught the eye of several rivals.

The Nasdaq-listed CEME group is worth €2.2bn, with founder and chairman Ronald Lauder holding 64% of votes.

Bertlesmann is not the only broadcaster to be named as a possible bidder for ITV, which has seen its share price plummet since last September, when it was valued at 112p. Others possible bidders include NBC and Saban Capital.

A Bertlesmann bid for ITV would also likely spark a competition inquiry because of its ownershipof Five.

At close of business yesterday, ITV shares increased 4.5% to close at 44p. At the time of writing this morning following the reopening of business, they were up 0.70% to 44.50p.

Source: BrandRepublic