UTV said yesterday that it was ready to pounce on SMG if its Scottish rival’s forthcoming flotation of Virgin Radio ran into trouble.

The Belfast-based broadcaster held talks last year with SMG about a merger, but the negotiations failed over the Scottish media group’s valuation.

John McCann, the chief executive, speaking as UTV released its interim results, said: “A merger with SMG still makes sense. Their stock’s cheaper now and we would be interested.” He added that central to an agreement would be SMG’s continued ownership of Virgin Radio. “We’re watching the float process carefully. If we see an opportunity, we will grasp it with both hands.”

UTV owns Talksport radio and most of the synergies of up to £7 million would come from a fusion of the respective radio stations.

SMG is trying to float Virgin Radio, aiming for a valuation of about £80 million, although the challenge is to make a relatively small radio player attractive to investors. UTV’s hope is that the listing, handled by ABN Amro, will run into difficulties.

UTV is valued at £228 million. SMG - battered by poor trading last year - is worth £145 million. With such a price disparity, SMG is unlikely to be willing to sell, particularly as Rob Woodward, its recently installed chief executive, is backed by an investor club led by Hanover Investments.

Mr Woodward gave UTV’s public wooing short shrift. “I can confim no communication of potential interest by UTV has been received by the SMG board,” he said.

Virgin Radio’s brand is licensed from Sir Richard Branson’s Virgin Group, but, under the present terms, is not allowed to be owned by a company that competes with Virgin Group. Virgin Group’s stake in the cable operator Virgin Media means that potentially every broadcaster is a rival.

UTV posted static figures, in which a strong performance from Talksport offset a weak television market. Turnover was marginally ahead at £57.2 million, while pretax profit was 5.6 per cent up at £8.98 million. Talksport, marginally up in the first half, is reporting advertising bookings 15 per cent ahead in the third quarter, reflecting the forthcoming Rugby World Cup.

At its Northern Irish ITV1 franchise, revenues were down 1 per cent in the first half, outperforming ITV plc, but are expected to be down 6 per cent in the third quarter, as UTV suffers from a fall in local advertising spending.

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