RTL loses interest in UBM's Channel 5 stake

RTL, the majority owner of Channel 5, is not interested in buying the 35 per cent stake in the broadcaster put up for sale by Lord Hollick's United Business Media.

For the first time, RTL yesterday stated openly that it had lost interest in buying the UBM holding in the UK station, as the pan-European broadcaster reported group interim results. RTL, increasingly aggressive in its plans for Channel 5, also announced it would increase the programming budget for the station for next year by 7 per cent to £158m.

Didier Bellens, RTL's chief executive, said: "We have decided to build Channel 5 with a partner. We prefer to work with a partner at a time when we are building this channel."

Although RTL has tried to buy the Channel 5 stake from UBM in the past, it balked at the reported £500m asking price. UBM is now trying to find other buyers.

After the recent publication of the draft Communications Bill, US broadcaster can, for the first time, buy into the UK sector. It is thought some American operators have recently shown interest in buying the 35 per cent holding in Channel 5.

Mr Bellens said that in the UK, the company would prefer to spend its cash on better programming for Channel 5, which is trying to shake off its image as a broadcaster of low-grade programmes.

The station will celebrate its fifth birthday with a rebranding next week. Mr Bellens said RTL would work with any new partner in Channel 5 to overtake Channel 4's position as the UK's number two commercial broadcaster, after the troubled ITV.

First-half revenue at Channel 5 rose 15 per cent to €121m (£76m) and sales are set to climb more than 20 per cent this year. Both ITV and Channel 4 are seeing shrinking revenues. Channel 5 is on course to break-even next year, RTL said.

Mr Bellens re-iterated that RTL is not interested in acquiring ITV, which it sees as being in terminal decline. Mr Bellens added he was confident about holding onto Channel 5's chief executive, Dawn Airey, who has been approached by ITV.

Mr Bellens dampened speculation that RTL planned a move into UK radio, saying it was not a "top priority". RTL, which is majority-owned by the private German media giant Bertelsmann, will cancel its stock market listing in London. It will remain listed in Brussels and Luxembourg.