SCOTTISH Media Group announced yesterday that it had sold its 18.2% stake in Ulster Television for #23.9m to Can-adian-based broadcaster Canwest Global Communications after a friendly takeover approach was rebuffed.
Scottish Media realised a profit of #3.5m after allowing for disposal costs. The average price paid for the shares was approximately 209p and the sale price was 250p a share cash.
The Scottish TV group, which last year acquired Grampian TV and owns The Herald and Evening Times newspapers, said that prior to the sale it had approached the board of Ulster with a view to making a recommended offer of 240p per share for the remaining shares, but this had been rejected.
Andrew Flanagan, Scottish Media chief executive, said that the sale ''was in the best interests of our shareholders''.
He also said that the disposal, which takes Canwest's stake in Ulster TV to just under 30%, ''Should also ensure that Ulster remains independent of other existing ITV franchise holders at a critical time, which we believe needs well-funded independent players, who, like ourselves, value quality regional programming and identity.''
Mr Flanagan said that in the beginning when Scottish Media first invested in Ulster TV it considered the company undervalued but after Canwest Global came in and the Ulster TV directors bought 11% of the company the situation changed. With the bid approach rebuffed, there was a danger of being ''locked in'' to the investment.
The proceeds from the sale will be used to reduce current borrowings and to fund ongoing investment opportunities.
Mr Flanagan reiterated that the next step would be to ''build outside of Scotland'' in the media sector. He said various poss-ibilities were under ''constant review''.
Canwest, which had built its stake in Ulster TV to over 10% prior to the purchase of Scottish Media's 18.2%, is the owner and operator of the Global Television network in Canada and also has interests in television networks in both Australia and New Zealand.
Its expansion into Ulster TV in October last year followed an agreement with the Irish Independent Radio and Telecommun-ications Commission to operate in the Republic of Ireland.
At the time it said it saw Ulster TV as a strategic investment as it began preparations for the launch of TV3 in the Republic and talked of a productive and collaborative relationship between the two companies.
Scottish Media's share price closed unchanged at 671p.