Morning:
6°c
It is tempting to wonder yet again at the way in which the City is swept along by rumours based on nods and winks. Though one of Endemol's chiefs did no more than refuse to rule out a bid for ITV, it was enough to set the traders' pulses racing. So ITV's sagging stock took off, rising by 12% in a day.
The wave of interest didn't last long. By yesterday evening it had fallen back by 8%. There is little point, however, in dwelling on the febrile nature of financial speculation. It's like complaining about the unpredictability of the British climate. We know we just have to live with it.
But I'm going to indulge in a little journalistic speculation - and I readily concede that that, too, is another fact of life - by wondering, first, whether an Endemol takeover might happen and then asking if it raises larger questions about Britain's premier commercial TV company falling into foreign ownership.
Needless to say, the official line from Endemol is that it doesn't comment on rumours. I rather like that predictable response. John de Mol, the company's co-founder and one of its main shareholders, starts off the rumour mill by giving one of those cryptic quotes which hint that an ITV takeover might make sense. Then his company spokespeople refuse to elucidate, excusing their "no comment" comment with some highminded guff about not indulging in speculation.
This reaction is par for the course, but there is an extra irony in that Endemol is the company that gave the world Big Brother, the surreal reality show based on complete transparency.
Anyway, can we be sure that Endemol really has either the money or the will to buy ITV? It's noticeable that there has been no constructive approach to ITV. De Mol, aware of ITV's low share price, has done no more than fly a kite. Of course, that is a perfectly reasonable tactic and it's just possible that it might lead to a bid. It has also had the effect of alerting other likely bidders, notably Haim Saban. One of his close allies, Ynon Kreiz, is Endemol's chief executive. But Saban's name crops up every time a media company looks as if it might be in play.
Other possibilities have also been broached, such as RTL, Europe's largest TV, radio and production company, in which the German media conglomerate Bertelsmann has the major stake. Another of the mooted runners and riders is NBC, the US broadcaster owned by General Electric.
What is strikingly similar about this group of would-be ITV buyers is that they are all foreign. No British bidder has been mentioned and it's hard to imagine one suddenly striding on to the stage.
It's fair to ask whether British viewers would be comfortable about ITV falling into alien hands, though I would hazard a guess that the majority of them don't know, or much care, who owns it now.
In my opinion it doesn't matter at all if the broadcaster is owned by a Dutch or a German company. I would be much less happy about a US buyer, not because I'm anti-American but simply because the US locks out foreign owners of its media (hence Rupert Murdoch's famed change of citizenship). It is unfair to open our doors to those who close theirs in our face.
That apart, I can see much to recommend in a merger between ITV and Endemol or RTL. Both are globalised companies. Both have had great success in producing television content, a continuing strength at ITV despite its problems over the last few years.
Meanwhile, in the face of the speculation, ITV's chairman, Michael Grade, and his senior staff are trying to maintain their focus on executing their turnaround plan, with a new director of television, Peter Fincham, in place and a series of new drama launches coming in the autumn, such as the musical drama Britannia High, and the dependable X-Factor.
What, though, of ITV's advertising revenue? There have been reports that it is expecting a severe downturn, possibly as great as a 13% fall. But sources within ITV say the ad problem is nothing like as bad as at regional newspapers, which are reliant on classified ads, and counsel that doom-laden predictions are wide of the mark.
I understand that Grade has been contacted by certain unidentified groups eager to take a slice of the business rather than the whole company. But nothing has come of such approaches thus far. He will be obliged to consider any offer seriously because he owes that to his doubtless dispirited shareholders.
Among their number is BSkyB, the satellite broadcaster that is appealing against a Competition Commission ruling - endorsed by the Business Secretary, John Hutton - that it must to cut its ITV stake from 17.9% to below 7.5%.
The decision over BSkyB's challenge is expected soon, and indeed might itself be responsible for the outbreak of takeover speculation. At the present share price, BSkyB stands to lose about £400 million, though it has already taken account of that loss. It will be fascinating to see how much time is granted to Sky to sell down its holding, and any bidder would be wise to wait until the appeals panel gives its verdict.
So, for the moment, it is little wonder that de Mol is keeping his powder dry, making it impossible to echo the title of Endemol's most profitable game show by asking him: is it a deal or no deal?
