London Briefing:As shares in commercial broadcaster ITV crumble to fresh lows almost daily, the honeymoon period for executive chairman Michael Grade can be declared officially over.
Grade quit his post as chairman of the BBC a year ago to take the top job at its main terrestrial rival. Colleagues at the state-controlled broadcaster were outraged at his defection, particularly as it came during tortuous negotiations with the government over its licence fee.
It was a coup for the ailing ITV, which just days earlier had seen Rupert Murdoch's BSkyB satellite broadcasting group snap up an 18 per cent stake in an audacious stock market raid.
The controversial Murdoch move effectively blocked any potential merger between ITV and the cable company NTL - or, indeed, with anyone else.
The Competition Commission has been deliberating over the Murdoch shareholding for some time now, and it is due to deliver its full report to the government early next month.
Last week, however, it emerged that ITV has urged the regulators to force the sale of the entire s
take, rather than just a part. Citing what it sees as the "material influence" that the stake gives Murdoch, ITV argued that anything other than total divestment "would not be effective or comprehensive".
It was this that sent ITV shares tumbling more than 3 per cent last week, to just under 93p, as traders anticipated the impact on the price if such a large stake flooded the market in a forced sale. On Monday, there came a further blow: a gloomy note from the Morgan Stanley media analyst, Patrick Wellington, who has cut his target price for ITV from 117p to 83p.
The shares responded by tumbling to just 85p, their lowest level since the group was formed in 2004.
Although recent news on advertising and audience share has been positive, the Morgan Stanley analyst believes that the outlook for ITV is less rosy than for its rivals and warns that television advertising revenue generally is likely to come under more pressure in the face of a consumer spending slowdown.
Neither is he convinced about prospects of a bid, whether from private-equity firms or rival European broadcasters.
ITV, which made its stock market debut in early 2004 at 148p a share, is not the only loser.
When it bought its stake last November, BSkyB paid 135p a share, or £930 million in total. If forced to sell at today's levels, it is looking at losses of well over £300 million (€426 million). Even for the Murdoch empire, that's a hefty shortfall.
Digging for a deal
Marius Kloppers, the 45-year-old chief executive of BHP Billiton, looks like a man in a hurry. Just six weeks after taking over at the world's largest mining conglomerate, he stunned the industry last week with his plans for a $150 billion (€102 billion) bid for rival Rio Tinto. While their mining operations are concentrated in Australia, BHP Billiton and Rio Tinto have dual share listings. Some 60 per cent of BHP's shares are listed in Australia, with 30 per cent in London, while for Rio Tinto the make up is 30 per cent in Australia and 70 per cent in London.
Any merger would be played out on a global scale. The groups are locked in price-setting talks with their customers in China, whose economy accounts for almost half of world demand for iron ore. Chinese authorities will not be thrilled at the prospect of so much of their supply being tied up in one conglomerate, but Kloppers insisted the deal would be a "customer-friendly combination". He added that an enlarged group could step up production to meet spiralling demand from China and India.
He also detailed synergies of some $3.7 billion from the deal, a huge figure, which nonetheless failed to impress some analysts. The true figure, they said, was only half that.
He also cautioned that, even if BHP offers a price large enough to persuade Rio Tinto to accept, a number of other hurdles must be overcome.
Fiona Walsh writes for the Guardian newspaper in London
