Northern Ireland media group UTV has made another approach to Scottish rival SMG, just three months after similar talks ended in stalemate.

SMG announced to the London Stock Exchange yesterday that it had received a new approach from UTV regarding a possible nil-premium merger of the two broadcasters.

"As a result SMG has entered into discussions with the UTV board which may or may not lead to a merger," SMG said in a statement, adding it had suspended its search for a new chief executive.

In August UTV offered SMG a 52 per cent stake in a merged enterprise. At the time, SMG wanted 55 per cent. UTV walked away following publication of SMG's results.

Since then the Scottish group's fortunes have waned further. A month later the Scottish group issued a profit warning. On the basis of current market valuation, SMG would control just 46 per cent of a merged group.

"I'm slightly surprised that they're talking about a nil-premium merger," Anthony de Larrinaga of SG Securities said.

"The fact that they're prepared to enter into discussions on the basis of a nil-premium merger is certainly a major change from what we've seen before . . . so I think it concerns the level of additional pressure that's been brought to bear on the board."

UTV said in a separate statement yesterday it had approached SMG on November 23rd and that there was no certainty that an offer would be made. SMG responded to the UTV approach last Friday.

Fixing a price that satisfies both sides and their respective shareholders is going to be the sticking point, according to London sources.

A merger between the two groups would create a £400 million (€592.5 million) media group, bringing together three of the four ITV franchises outside England and Wales as well as two of the UK's three national analogue radio stations, SMG's Virgin and UTV's TalkSport. - ( Reuters/ Guardian service)