French eye ITV's £120m ads business

THOMSON, the French technology group, is planning a bid for ITV's cinema advertising business, Carlton Screen Advertising, which is valued at £120 million.

ITV chief executive Charles Allen has made it clear that he regards the cinema advertising business as a non-core asset and is reviewing its future in the group. He is believed to have welcomed the approach from Thomson.

Carlton Screen Advertising is the world's largest cinema advertising business. In Britain, it handles advertisements for 65% of cinemas, including the Odeon and UCI chains. It has been valued by merchant bank Investec at £66 million. Its sole rival in the UK is Pearl & Dean, owned by Glasgow company SMG.

Also included in the sale is Screenvision US, which has more than half the fledgling American cinema advertising market, and Screenvision Europe, which operates in nine countries. These are jointly owned by ITV and Thomson.

Investec values ITV's share of the businesses at £50 million.

It is not clear whether Thomson has the right of first refusal on the sale of ITV's stake in the Screenvision companies.

It is understood that Debbie Chalet, the chief executive of Carlton Screen Advertising, and finance director Trevor Davis are prepared to stage a management buyout of the firm and have been approached by venture capital groups seeking to back any deal.

Chalet said she had not yet made a formal offer for the business and that any offer would involve the entire management team.

ITV is disposing of its non-core businesses and is in the process of selling Moving Picture Company, a digital special effects firm that recently worked on the film Troy, for about £25 million. Thomson is considered one of the most likely buyers of MPC, though US film firm Kodak is a leading contender. A deal is expected this month.

ITV raised £170 million in September by selling its 5.5% stake in Thomson to investment banks Citigroup and UBS. Neither ITV nor Thomson would make any comment.