Report: Dyke 'looking at ITV, Five merger'

The private investment group seeking to take control of ITV would attempt to merge the broadcaster with Five, according to a report in The Telegraph today.

The consortium - comprising Apax Partners, Goldman Sachs and Blackstone and headed by former BBC DG Greg Dyke - is currently working up a revised offer to take control of ITV after the company's board rejected their first offer last week.

Five is 100% owned by RTL Group, itself 90% owned by Bertelsmann. A "merger" would most likely involve ITV inviting Bertelsmann to take a stake in the enlarged group, the newspaper suggested.

A merger between ITV and Five is possible but would face a number of regulatory hurdles to become a reality.

First Ofcom would need to be satisfied that the new broadcaster would be in a position to fulfill Five's regulatory and PSB requirements, while the DTI would determine whether such a merger would be in the public interest. The OFT would then get involved with an investigation into the new broadcaster's ad sales, which would total between 55 and 60% of all commercial TV ad revenues.

A spokesman for RTL denied that it had held talks with the consortium over the possible merger and insisted it was "happy with the development of Five".