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ITV PLC (ITV)

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Tuesday 21 December, 2004

ITV PLC

Scheme of arrangement

ITV PLC
21 December 2004

21 December 2004

                                    ITV plc

      Scheme of arrangement and amendment of ITV's articles of association
      to suspend certain registration and reporting obligations to the SEC

Summary
     
•        ITV plc ('ITV') announces that it intends to effect a reorganisation
of its share capital for the purpose of making it eligible to suspend certain
registration and reporting obligations to the United States Securities and
Exchange Commission (the 'SEC') that it inherited from Carlton Communications
Plc ('Carlton') following the merger of Granada plc and Carlton that formed ITV
in early 2004.

•         These obligations are very costly in both financial and management
time and confer no material benefit on ITV.  ITV has no securities listed in the
United States (the 'US').  These obligations are currently expected to give rise
to a cost of over £4 million in the first year and over £3 million per annum
thereafter.

•         The obligations may be suspended if the number of US resident persons
who hold each class of ITV ordinary shares and ITV convertible shares ('ITV
Shares'), either directly or through another person (for example, a nominee or
broker), falls below 300.

•         The reorganisation will be effected by way of a scheme of arrangement
(the 'Scheme') pursuant to which holdings of ITV Shares held by, or on behalf
of, US resident persons that do not exceed 175,000 shares will be cancelled.

•         In consideration, affected registered shareholders will receive a US
dollar cash payment representing (approximately) a 15% premium to the market
price of the ITV Shares cancelled under the Scheme on the dealing day prior to
the Scheme becoming effective, plus a US$500 payment in respect of each relevant
holding.

•         It is expected that the reorganisation will result in the cancellation
of approximately 15.9 million ordinary shares and approximately 0.6 million ITV
convertible shares, representing approximately 0.4% of the issued ordinary share
capital and approximately 0.5% of the issued convertible share capital
respectively.  Following the Scheme becoming effective, ITV intends to make a
cash placing of the same number of ITV Shares as are cancelled under the Scheme.

•         The net result of the reorganisation and proposed cash placing will be
earnings enhancing for ITV for the financial year ending 31 December 2005.

•        The approval of affected shareholders and all other shareholders is
required at shareholder meetings that are expected to be convened for early
February 2005.  The approval of the High Court of Justice in England and Wales
is also required for the Scheme to become effective.

•        In addition, ITV proposes to change its articles of association to
enable it to continue to benefit from the suspension of its US registration and
reporting obligations.  This change will allow ITV to sell holdings of ITV
Shares held by, or on behalf of, US resident persons that do not exceed 175,000
shares.  This should not affect entitlements under the Scheme in respect of ITV
Shares that are subject to the Scheme.

•        ITV expects to dispatch documentation relating to the reorganisation to
shareholders on or around 13 January 2005.

Commenting on the reorganisation, Sir Peter Burt, Chairman of ITV, said:

'As a UK listed company, ITV complies fully with the UK listing rules and other
applicable regulations. Complying with the additional and different US
obligations would be a significant burden in financial terms and on management
time and would be of no material benefit to ITV.  We therefore believe that
there is a real commercial benefit in seeking to suspend these obligations.'

Citigroup Global Markets Limited is acting as financial adviser and corporate
broker to ITV.

This summary should be read in conjunction with the full text of the following
announcement.

ANALYST ENQUIRIES:

ITV                                   020 7620 1620

James Tibbitts

CITIGROUP GLOBAL MARKETS              020 7986 4000

Simon Gluckstein
Ed Matthews

MEDIA ENQUIRIES:

CITIGATE DEWE ROGERSON                020 7638 9571

Simon Rigby
Anthony Kennaway

Citigroup Global Markets Limited is acting for ITV and no-one else in connection
with the reorganisation and will not be responsible to anyone other than ITV for
providing the protections afforded to clients of Citigroup Global Markets
Limited nor for providing advice in relation to the reorganisation.


                                    ITV plc

      Scheme of arrangement and amendment of ITV's articles of association
      to suspend certain registration and reporting obligations to the SEC

ITV plc ('ITV') announces that it has today filed documentation with the High
Court of Justice in England and Wales (the 'High Court') initiating a proposed
reorganisation of its share capital (the 'Reorganisation').  The purpose of the
Reorganisation is to make ITV eligible to suspend certain registration and
reporting obligations to the United States Securities and Exchange Commission
(the 'SEC') that ITV inherited from Carlton Communications Plc ('Carlton')
following the merger of Granada plc and Carlton that formed ITV in early 2004.

1.         Background to the Reorganisation

ITV ordinary shares and ITV convertible shares ('ITV Shares') are listed on the
London Stock Exchange and ITV fulfils its registration and reporting obligations
to the UK Listing Authority and the London Stock Exchange.

ITV does not currently have any securities listed on any stock exchange in the
United States (the 'US') and does not have any intention of raising equity share
capital in the US.  However, because Carlton previously had securities listed in
the US, ITV is required under US securities laws to fulfil Carlton's
registration and reporting obligations to the SEC in respect of ITV as a whole.
These obligations are very costly in both financial terms and management time
and confer no material benefit on ITV.  However, these obligations may be
suspended if the number of US resident persons holding each class of ITV Shares
(either ITV ordinary shares or ITV convertible shares), either directly or
through another person (for example, a nominee or broker), falls below 300.

ITV believes that the SEC may be considering proposals to relieve certain
companies from their registration and reporting obligations.  However, since any
such proposals may not become effective before ITV becomes subject to its SEC
registration and reporting obligations in June 2005 (if they are made at all),
ITV would still be required to undertake all necessary steps to comply with
these obligations and would therefore incur the related costs (which have
increased from ITV's original estimates and are currently estimated to be over
£4 million in the first year and over £3 million per annum thereafter).  In any
event, it is not certain that any such revised proposals would apply to ITV or
provide the required relief.

2.         Principal terms of the Reorganisation and the Scheme

Accordingly, ITV is proposing the Reorganisation to be effected by way of a
scheme of arrangement under section 425 of the Companies Act 1985 (the 'Scheme')
and the amendment of ITV's articles of association, with the intention of
reducing the number of US resident holders of each class of ITV Shares to below
300 so that ITV may suspend its registration and reporting obligations to the
SEC.

Under the Scheme, ITV ordinary shares and/or ITV convertible shares that are
held by a US resident person for his, her or its own account, or that are held
by any registered holder for, or on behalf of, a US resident person, will be
cancelled if the relevant holding did not exceed 175,000 ITV ordinary shares and
/or 175,000 ITV convertible shares as at:

•                     the Initial Record Time (6.00 p.m. (UK time) on 20
December 2004); and

•                     the Voting Record Time (expected to be 6.00 p.m. (UK time)
on 5 February 2005); and

•                     the Scheme Record Time (expected to be 6.00 p.m. (UK time)
on 10 March 2005).

However, in respect of each such holding, if the number of ITV ordinary shares
and/or ITV convertible shares so held at the Scheme Record Time is greater than
the number of such shares so held at the Initial Record Time, only the number of
ITV ordinary shares and/or ITV convertible shares that were so held by the
relevant shareholder at the Initial Record Time will be cancelled.  ITV has
calculated that, by cancelling the holdings of US resident persons of 175,000
ITV ordinary shares or less and 175,000 ITV convertible shares or less, the
number of US resident holders of each class of ITV Shares would be reduced to
below 300.

The cancellation of ITV ordinary shares and ITV convertible shares under the
Scheme will take effect by way of a reduction of capital of ITV in consideration
for which a US dollar cash payment will be made to each registered holder of ITV
ordinary shares and/or ITV convertible shares cancelled under the Scheme.  The
registered holder of ITV ordinary shares cancelled under the Scheme will
receive:

•                     a US dollar cash payment representing approximately 115
per cent. of the market value of the ITV ordinary shares cancelled on the
business day before the Scheme becomes effective; and

•                     US$500 in relation to any ITV ordinary shares held by the
registered holder for his, her or its own account that are cancelled under the
Scheme; and

•                     US$500 in relation to each person who is resident in the
United States for, or on behalf of, whom the registered holder holds ITV
ordinary shares that are cancelled under the Scheme.

Holders of ITV convertible shares will receive a US dollar cash payment
calculated on an equivalent basis.

Based on detailed enquiries that ITV made prior to announcement of the
Reorganisation, the Scheme is expected to result in the cancellation of holdings
of ITV ordinary shares held by, or on behalf of, approximately 609 US resident
persons representing approximately 15.9 million ITV ordinary shares
(approximately 0.4 per cent. of ITV's issued ordinary share capital) and ITV
convertible shares held by, or on behalf of, approximately 73 US resident
persons representing approximately 0.6 million ITV convertible shares
(approximately 0.5 per cent. of ITV's issued convertible share capital).

If the Scheme is successful, the cost savings to the Company that will result
from suspending the SEC registration, reporting and other related obligations,
which have increased from ITV's original estimates, are currently expected to be
over £4 million in the first year (comprising, among other things, the fees of
accountants, lawyers and other advisers and the conversion of prior years'
accounts to US Generally Accepted Accounting Principles) and over £3 million per
annum thereafter.

After the Scheme becomes effective, in order to maintain the level of ITV's
issued share capital and to reduce the overall cost of the Scheme, ITV intends
to conduct a cash placing with institutional investors of a number of new ITV
ordinary shares and new ITV convertible shares equal to those cancelled pursuant
to the Scheme.

The net result of the Reorganisation and the proposed placing of new ITV
ordinary shares and new ITV convertible shares will be earnings enhancing for
the financial year ending 31 December 2005.

3.         Amendment of ITV's articles of association

If, at any time following the Scheme becoming effective, 300 or more US resident
persons hold either class of ITV Shares, either directly or through another
person (for example, a nominee or broker), the suspension of ITV's registration
and reporting obligations will cease.  Accordingly, to reduce this risk, certain
changes are being proposed to the Company's articles of association to allow
holdings of 175,000 or less of either class of ITV Shares (or such other greater
or lesser number of ITV Shares that ITV shareholders may decide in general
meeting from time to time) held by, or on behalf of, a US resident person to be
sold in the market.  Any such sales will be made at the best price reasonably
obtainable at that time on the London Stock Exchange's market for listed
securities.  No premium to the market value of such ITV Shares will be paid.
The proceeds of such sales will be paid to the relevant registered holders of
the ITV Shares sold.  ITV will issue a public announcement of its intention to
use this proposed power of sale in advance of implementing any such sales and
will only seek to use such power if the directors become aware that the number
of US resident persons holding either class of ITV Shares, either directly or
through another person, may exceed, or has exceeded, 300.  This provision should
not affect entitlements under the Scheme in respect of ITV Shares that are
subject to the Scheme.  Certain other changes to the Company's articles of
association are also being proposed.

4.         Unaffected ITV Shares

ITV shareholders will not be affected by the Scheme if they do not have a
registered address in the US, and do not hold any ITV Shares for, or on behalf
of, a person resident in the US.  In addition, registered holdings held by, or
on behalf of, US resident persons of more than 175,000 ITV ordinary shares and/
or more than 175,000 ITV convertible shares, in each case as at the Initial
Record Time, the Voting Record Time or the Scheme Record Time, as described in
paragraph 2 above, will not be affected.

ITV ordinary shares and/or ITV convertible shares acquired by, or on behalf of,
a US resident person to whom the Scheme applies after the Initial Record Time,
or (in relation to registered holdings) which do not appear in ITV's register of
members as being so held until after that time, will not be eligible for
cancellation under the Scheme to the extent that, as a result of such
acquisition, the relevant holding of ITV ordinary shares and/or ITV convertible
shares held by, or on behalf of, the relevant US resident person at the Scheme
Record Time exceeds the number so held at the Initial Record Time.  Such excess
ITV Shares may, however, be liable to be sold pursuant to the provisions
proposed to be included in ITV's articles of association that are described in
paragraph 3 above.

5.         Meetings and consents

The implementation of the Reorganisation and the Scheme will be dependent on a
number of factors including the approval of shareholders and the separate
approval of the relevant classes of shareholders.  The consent of the High Court
will also be required for the Scheme to become effective.

At initial hearings scheduled for 11 January 2005, the High Court will be
requested to set dates for shareholder meetings at which the relevant classes of
shareholders will be able to vote on the Reorganisation.  Further details will
be included in the scheme documentation that is expected to be dispatched to
shareholders on or around 13 January 2005.

The times and dates referred to in this announcement are indicative only and
will depend upon, among other things, the timetable fixed by the High Court.  If
there are revisions to the timetable, ITV will make an appropriate announcement
as soon as practicable.  In any event, further announcements will follow as
required.

ANALYST ENQUIRIES:

ITV                                   020 7620 1620

James Tibbitts

CITIGROUP GLOBAL MARKETS              020 7986 4000

Simon Gluckstein
Ed Matthews

MEDIA ENQUIRIES:

CITIGATE DEWE ROGERSON                020 7638 9571

Simon Rigby
Anthony Kennaway

Citigroup Global Markets Limited is acting for ITV and no-one else in connection
with the Reorganisation and will not be responsible to anyone other than ITV for
providing the protections afforded to clients of Citigroup Global Markets
Limited nor for providing advice in relation to the Reorganisation.


                      This information is provided by RNS
            The company news service from the London Stock Exchange