ITV - The Kaleidoscope has been shaken

Mid afternoontoday Brandes (8%) and Fidelity(11%) the 2 largest shareholders in ITV were approached to sell their shares at 125p.

Finally they agreed (with others) to sell 18.9 % of the issued shares to Murdoch's BSkyB (39% owned by News Corp.) at a finally negotiated price of 135 p per share. A premium of over 20p (16.6%)on the market price at the time (115.7p up 1% on day) but not announced until the close of the market.

This punt of £ 940 Mn. scooping 696 million shares gives Murdoch 17.9% - The 2003 Communications Act, prohibits BSkyB from controlling more than 20% of ITV. Whilst it does not give the Australian American media monster control, it gives him a very powerful voice in the boardroom.

This follows stories earlier that RTL (34 television and 33 radio stations in 11 countries - dire Channel 5 in the UK), part of the German Bertelsmann media Empire was working with private equity firms on a potential £5bn (US$9.4 Bn.)bid for ITV. RTL were said to be running the ruler over ITV in cahoots with private equity group Kohlberg Kravis Roberts, which has Lord Hollick as a partner.

Last week heavily indebted US based NTL (whose largest shareholder is the bearded wonder, serial groper, Sir Dickie Branson) confirmed that it is to hold talks with the broadcaster about a potential tie-up, although these do not appear to have happened yet. Murdoch will not be anxious to see competitors from the cable networks muscling in on what he sees as his fiefdom.

It would be foolish to overlook the interests of Apax Partners who now own 49.9% of Central European Media Enterprises Ltd. (CME) (NASDAQ/Prague Stock Exchange: CETV) and who have previously been involved in a private equity gang who withdrew a bid earlier which involved Greg Dyke.

Time Warner (NYSE:TWX) are also said to be interested in bidding.

As a tiny part of the deal, as a consolidation of ITV's media interests , we may see the tired and outdated Friends re-United outfit (costing ITV, £120Mn over a period of time) be swallowed up in Murdoch's My Space. Should RTL emerge as winners, and have to divest itself of Channel 5 (required by law) then a nice swapparooney looms for Murdoch.

Finally, how will BBC and Channel 4 compete with Sky / ITV / NTL for US TV rights, series , sports ?

IT'S KALEIDOSCOPE TIME FOLKS !!

To quote from our Dear leader after 9/11 when he spoke so movingly at Sedgefield....

"The kaleidoscope has been shaken,The pieces are in flux. Soon they will settle again."

For those amongst us who are lost by his imagery, turnto page 30 of that masterpiece of 20th Century philosophy by Dan Brown, The Da Vinci Code, and look at page 30:

"Five months ago, the kaleidoscope of power had been shaken, and Aringarosa was still reeling from the blow."

...and watch out for Lew Grade's son to find himself a new job!