STV Group Plc - History

History

Originally formed as Scottish Television, it changed its name to Scottish Media Group in 1996 when it acquired Caledonian Publishing, owners of Glasgow-based newspapers The Herald and Evening Times (both of which have since been sold). It then went on to acquire the ITV licence holder for Northern Scotland, Grampian Television in June 1997. In August 1997 the company acquired 15% stake in UTV In 1999 it launched a new Sunday broadsheet newspaper, the Sunday Herald. The company renamed itself again as "SMG plc" in 2000 by which time it had expanded further through the acquisitions of Primesight (outdoor advertising), Pearl & Dean and Ginger Media Group, which included Ginger Television and the UK radio station, Virgin Radio. Talks were also held which could have led to Border Television and Ulster Television being bought, but they came to nothing.

On 24 March 1999 Mirror Group sold its 18.6% stake to Granada. During the summer, the STV Group held talks about buying out the other shareholders in GMTV, with Disney believed to be keen on the idea, many city observers believed this was a defensive move to fend off a takeover bid from Granada. By September an agreement had been reached to acquire Guardian Media Group 15% stake for £20million, but both Carlton and Granada objected to the deal. Guardian Media Group finely concluded in selling off its 15% stake in GMTV for £18m in January 2000, but STV group only acquired 5% with the remaining 10& going to Carlton and Granada, which give all companies 25%.

In the first week of September, 1999 the company acquired a 37.4% stake in Heart of Midlothian F.C. for £8M. A few days later the company unveiled its interim results with its pre-tax profits up 2 per cent to£24 million with a turnover of £111.2 million

In early December 2000 the group acquired a 14.9% stake in Scottish radio holding, in anticipation of a relaxation of radio ownership rules and within four months increased this to 27.7%. By 2004 the company sold there 27.8% stake in Scottish Radio Holdings to Emap for £90million in anticipation of consolidation in the radio market.

Flextech Owner Telewest sold its 16.9% stake in STV Group to an investment bank for £45million as part of their plan to raise funds to help clear off debt. Throughout 2003/2004 rumours appear about company being broken up, with its ITV interests being sold off in an attempt to wipe out its £380m debt and boost its balance sheet, but the reverse happened with the Herald newspapers and Scottish Radio Holdings shared being sold off. IN late 2003 Ulster TV along with venture capital group 3i and Scottish Radio Holdings to bid for SMG fro £400million but withdrew the offer after there believed the share price was to high.

In September 2004, ITV plc purchased STV Group 25% in GMTV for £31 million, after being given the go ahead from the office of Fair Trading, despite advertiser fears, it could give ITV influence over pricing. SMG said "SMG are pulling out of GMTV because it did not want to hold a minority interest in someone else's media business".

Andrew Flanagan unexpectedly resigned as Chief executive in July 2006, Although he helped create the company since 1998, his spell in charge will be remembered by many in the television industry as a period which saw a dramatic decline in the amount of programmes made by the company for transmission within Scotland alone.

Rob Woodward became the new Chief executive in 2007, and started a major reconstruction of the group instigated a sell off of poorly performing assets, starting with Primesight being sold for £62m to a private equity firm. SMG said in a statement that the price GMT Communications Partners is paying represents a "clear uplift" on offers previously received for Primesight. Primesight have been prosecuted a number of times for the display of advertisements without consent which is an offence under UK Planning Acts. The lack of consent for many of Primesight's displays is said to have reduced the selling price by up to £30 million.

Further major changes occurred when it sold Virgin Radio to an Indian group on 31 May 2008, SMG plc changed its name to STV Group plc. The company says the name change is to highlight its renewed focus on television, encompassing the STV Central and STV North franchises and the company's production business. The new STV Group branding was introduced on 1 October 2008.

And a new deal which resorted in Pear and Dean handling the advertising for Showcase Cinemas, which meant that the Pearl & Dean titles will now appear in just under half of UK cinema sites.

By 2010 the group had sold off all non television assets, with Primesight (outdoor advertising), Pearl & Dean for £1 to Image Ltd, a newly formed company backed by Empire Cinemas director Thomas Anderson, with STV still recouping £9.1m from the business due to a 2010 payment from Vue Cinemas This action helped reduce debt and helped restructure the company to concentrate on its core television businesses. ITV plc held a 16.9% stake in the business, since 1999 when Mirror Group sold its stake to Granada plc which has been reduced to around 6.7% following a rights issue.