SDN was put on the market in February and ascribed a value of around £200m by analysts, with broadcast services business Arqiva seen as a likely buyer.
It broadcasts Freeview and Top-Up TV channels on behalf of content providers including Discovery and QVC and is on course to make £40m in revenues this year.
The reason for pulling the sale is it would allow ITV to use SDN to help offset its pension deficit. ITV has entered discussions with the trustees of its pension fund about a partnership arrangement under which SDN would provide asset backing to the pension scheme, which would reduce the deficit on a funding basis.
In addition, ITV is to borrow £120m through issuing convertible bonds in a bid to extend its average debt maturity, diversify its funding and increase the efficiency of its balance sheet.
The bonds, which mature in 2016, will pay between 4% and 4.75% per year in interest and can be converted into ITV shares at a premium of between 32% and 37% to ITV's current share price.
ITV has also restated that it has no current plans for a rights issue.
John Cresswell, chief operating officer of ITV, said: "With the proceeds of this convertible offering, to date this year we will have raised over £225m of new borrowing with maturities ranging from 2015 to 2019 and without financial covenants."
The report comes just a day after Sir Michael Bishop, ITV's preferred candidate to become its new chairman, decided he did not have the energy to take on the role.
It has been widely reported that the former chairman of airline BMI concluded that the company was crippled by a dysfunctional board and strained relationships with its investors.
ITV is still talking to more than one candidate, it has since claimed. The shortlist is said to include the former chairman of BT, Sir Christopher Bland, but at least two others have ruled themselves out.
These are reported to be Martin Broughton, the chairman of British Airways, and Sir Christopher Gent, the chairman of GlaxoSmithKline.
At the same time, once a chairman has been appointed. He intends to leave to seek a new challenge once a replacement CEO has been found.
Cresswell has worked for various ITV companies for more than 20 years.
United Kingdom
ITV scraps SDN sale and borrows £120m
LONDON - ITV has dropped plans to sell SDN, its digital terrestrial television multiplex business, and is to borrow £120m.
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