TVC Holdings buys 11% stake in UTV for £14.9m

INVESTMENT FIRM TVC Holdings has become the largest single shareholder in UTV Media, acquiring an 11 per cent stake in the radio and television company for a total sum of £14.9 million (€19 million). Laura Slatteryreports.

TVC, the Iseq-listed holdings group, said the investment was part of its strategy to take "significant stakes" in both public and private companies across a range of sectors in the UK and Ireland.

Shane Reihill, TVC's executive chairman, said he believed UTV, which is listed on both the London Stock Exchange and the Irish Stock Exchange, was a well-managed business that was currently undervalued by the market. The media company's share price has dropped by more than two-thirds over the last year.

The Belfast-based company, which shows the programmes of broadcaster ITV in Northern Ireland, owns a range of multimedia assets, including 24 local radio stations - among them Dublin's FM104 - and British national sports radio station Talksport.

At its first agm since its flotation last year, Mr Reihill said it was in talks with two listed UK companies and was planning to invest €15 million and €25 million in each company.

TVC has the advantage of being debt-free, putting it in a strong position in the current environment as other credit-seeking companies scour the market for finance.

The company's management has "a proven track record of prudently valuing investments and delivering significant investor returns" with an investment horizon of three to five years, Davy Research analyst Stephen Furlong said in a note to shareholders.

TVC holds a 27.1 per cent stake in Norkom, the Irish company listed on Dublin's IEX and London's AIM markets. Its portfolio also includes the Quality/Comfort Inn hotel chain.

The UTV investment represents 15 per cent of its net assets after minority interests, as of March 2008.

UTV, whose chairman John McGuckian is a non-executive director of TVC, said yesterday that it had received acceptances from 41.5 per cent of its investors supporting a rights offer to raise £49.9 million.

The underwriters to the rights offer will take up the remaining shares.

UTV fell 5.5p, or 4.3 per cent, to 123p in London trading, giving the company a market value of £118 million. TVC bought its shares in the company at an average price of 142.8p, a 10 per cent premium to the 130p rights issue price.