The Board of S4C Digital Media Ltd announces that it has sold its shareholding in SDN Ltd (“SDN”) to ITV plc (“ITV”) for a net consideration of approximately £34 million in cash.

SDN is a UK digital terrestrial television (DTT) multiplex operator which holds the licence from Ofcom to broadcast DTT channels over specified bandwidths. Its customers include Five, S4C, the BBC, QVC, Sit-up TV, Teletext, Disney and Turner Classic Movies. SDN had three shareholders; United Business Media plc (UBM), MUKBL Digital Ltd (MUKBL) (formerly ntl digital ltd) and S4C Digital Media Ltd (S4CDM).

S4C Digital Media Ltd is a wholly owned subsidiary of S4C Masnachol Cyf, the commercial arm of the publicly funded Welsh-language broadcaster.

Under the provisions of the SDN shareholders’ agreement and Articles of Association, UBM and S4CDM exercised pre-emption rights in relation to MUKBL’s shareholding in SDN. Subsequently they entered into a definitive agreement with ITV to sell SDN for approximately £134 million including net debt assumed of £33 million, subject to adjustments to reflect SDN working capital balances and other potential consideration adjustments.

Huw Jones, S4C’s Chief Executive, says, “This is a very satisfactory conclusion to a commitment originally made by S4C’s commercial subsidiary back in 1997. This substantial return on our investment will provide an important support for S4C’s public service activities in the years ahead. This is particularly important at a time when advertising revenues are projected to fall.”