Wrong numbers

5 January 2006 By Mike Verdin

A deal has attractions. It would ease ITV s fears about a lack of digital distribution and would turn BT into a real rival to NTL and BSkyB. But ITV looks expensive. In pursuing a deal BT might reawaken fears it is once again courting value destruction.

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Shares in ITV, the UK broadcaster, rose 1.5% on January 4 to 116p on rumours that it may be bought by BT, the telecoms operator. The stock has risen 4% since Christmas.

BT declined to comment on the speculation.

In July, ITV shares touched 130p on reports of a joint bid by Time Warner, the US media conglomerate, Apax Partners and Goldman Sachs.

BT is to start providing television services to broadband customers in the autumn. It has signed content deals with BBC Worldwide, Paramount and Warner Music.

ITV is investigating ways of reaping revenues direct from consumers. The broadcaster has announced a mobile portal and trials of TVoverbroadband services.

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