In a statement issued this afternoon UTV said that it had written to the board of SMG to confirm that it no longer intends to pursue its merger proposal.
Its withdrawal of its merger offer appears to have been influenced by SMG's recent results. SMG reported that turnover was down 7% from £94.9m to £88.6m and TV revenues fell. It is currently in the process of selling off its Pearl & Dean cinema advertising and Primesight outdoor advertising sales businesses.
SMG had previously rejected all approaches from UTV, which owns the the ITV franchise in Northern Ireland and TalkSport.
UTV's statement said: "In reaching its decision, the board of UTV has taken into account the interim results of SMG announced on September 13 2006 and the ongoing weakness in the advertising market faced by the ITV network.
"As a consequence of this statement, the City Code on Takeovers and Mergers prohibits UTV from, inter alia, announcing an offer or possible offer for SMG within six months of today's date unless there is a material change of circumstances or there has occurred an event which UTV has specified in this statement as an event which would enable the statement to be put aside."
UTV said it reserved the right to announce an offer or possible offer for SMG within six months in the event that an agreement or recommendation from the board of SMG is forthcoming or there is an announcement by a third party of an offer for SM.
It offered a third scenario where it might bid in which "SMG announces a 'whitewash' proposal or a reverse takeover".
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