ITV stake in SMG is slashed

ITV's refusal to take up its option on SMG's recent rights issue has cut its shareholding in the Scottish broadcaster from 16.7% to 5.57%. 

SMG attracted around 57% take-up of its rights issue, announcing yesterday (19 December) that it had raised £95.1m to clear its debts. However, its biggest share holder, ITV, declined to take part. The effect of the new shares being issued is that ITV's stake in its Scottish franchisee has been massively diluted.

It is not clear at this stage whether ITV remains SMG's biggest shareholder as the Scottish company is yet to publish new notifications of shareholders owning more than 3% of the company after the rights issue.

The £95.1m rights issue has bought SMG some time over the sale of Virgin Radio, which has thus far failed to attract an offer at a level the company is prepared to sell at.

It will also help reduce SMG's onerous debts, which will be brought in line with the industry average.