Fidelity, the big fund manager, has offloaded another batch of shares in SMG as the Scottish media company's merger talks with broadcaster UTV drag on.

Fidelity informed the London Stock Exchange yesterday that it had sold 500,000 shares in Glasgow-headquartered SMG, which owns the STV and Grampian television franchises and Virgin Radio.

Following the disposal, Fidelity retained a holding of 45,610,859 ordinary shares in SMG, representing 14.44% of the total.

Fidelity, which sold 764,100 ordinary shares in SMG last September, remains the second-biggest shareholder in percentage terms behind ITV, which has 17%.

Over the weekend it was reported that UTV, the owner of Ulster Television and TalkSport radio, and SMG are still haggling over the terms of the proposed combination.

Last month, SMG revealed it was again in merger talks with UTV about a deal which would almost certainly be on poorer terms for SMG than those offered by UTV in the summer.

Conflicting reports on Sunday suggested both companies are still split on who should own the larger stake in a merged entity.