ITV 'poised to take over reunions website'

The sale of Friends Reunited for more than £120m (€177.4m) appeared to move a step closer today after a report said broadcaster ITV was near to a takeover deal.

ITV is thought to have finished examining the company’s books and could sign a binding agreement with the website’s owners as soon as today, with the deal completed by the end of the month, the Daily Telegraph reported.

It is expected that Friends Reunited, which has more than 12 million subscribers, will be worth at least £120m (€177.4m), with the final takeover price possibly rising as high as £170m (€251m) depending on future performance.

Founders Steve and Julie Pankhurst, the husband and wife team who set up the website with business partner Jason Porter five years ago, stand to net around £30m (€44.3m) if the deal goes through.

Chief executive Michael Murphy and other members of the management team own 30% and are expected to remain with the business, the report added.

Spokesmen from ITV and Friends Reunited declined to comment on the speculation today.

It is thought Friends has attracted strong interest as traditiona media companies look to develop more channels of advertising online.

In ITV’s case, the broadcaster has established a Consumer division to explore alternative revenues streams outside of free-to-air advertising in mobile, broadband and other new media services.

BT, News Corporation and Daily Mail & General Trust are also believed to have shown interest in the Friends website, which reunites old school friends and has grown rapidly into one of Britain’s most successful new media companies.

The business has received takeover approaches in the past but in March 2003 opted to keep hold of the business and fund expansion through a management buy-in that led to the appointment of Mr Murphy, a former Financial Times executive.

The Friends management team hired corporate finance company LongAcre this summer in order to explore takeover proposals in more detail.