Five owner RTL tipped to take control of ITV
It is understood that RTL's parent company, German media group Bertelsmann, has set aside 1bn for Zeiler to use for European acquisitions.
Bertelsmann has long bemoaned the fact that despite owning Five it doesn't have a sizeable presence in the UK, one of the world's biggest media markets. ITV is said to be Zeiler's top priority after the Government effectively ruled out any merger between Five and Britain's fourth channel in favour of a Channel 4 tie-up with BBC Worldwide.
BSkyB has a 17.9% stake in ITV, but is currently embroiled in a legal battle at the Court of Appeal after the Competition Appeal tribunal ruled that it must reduce its stake to less than 7.5%. The buyer of the Sky holding is expected to use it as a launch pad for a full takeover.
Last week, Jeremy Darroch, the chief executive of BSkyB, said that if the group was unsuccessful with its latest appeal it will be forced to sell down the stake. Such a move would result in BSkyB taking a considerable loss but would also give a chance for RTL to boost its UK presence.
Rumours in the City have been circulating that RTL would be prepared to hand BSkyB Five in return for its ITV stake.
Paul Richards, media analyst at Numis Securities said: "With a merger with Channel 4 looking less likely the question now is whether RTL might look at ITV – owning the two is a real option."
Another City analyst said: "What could be interesting is the prospect of RTL doing a swap with Sky. In this case RTL would buy Sky's stake in ITV and use this as a platform to launch a full bid for ITV enabling it to get a much bigger presence in the UK as part of its European portfolio. Sky would then own Five, neatly bypassing its problem that it can't own ITV because it is protected under law.
"If Murdoch then said he was going to invest everything in Five he could possibly build a meaningful commercial, free-to-air competitor in the UK that is not reliant on subscription television. The fifth channel could become something more substantial and build a greater share."
Five's chair and chief executive Dawn Airey has said that merging Channel 4 and Five would be like "gin and tonic", opposing Channel 4 chief executive Andy Duncan's comments that it would be like "mixing oil and water".