* ITV reported to be prospective buyer
* Recently launched Republic TV channel dragging on UTV
* TV sale would leave it with radio business (Adds analyst comments, details, share movement)
By Noor Zainab Hussain and Paul Sandle
Aug 24 (Reuters) - Northern Ireland's UTV Media Plc,one of only two independent broadcasters in the ITV network,said it may sell its TV franchise, sending its shares up as muchas 13.4 percent.
The Belfast Telegraph reported on Saturday that UTV was dueto sell its television division to ITV Plc in amulti-million-pound deal. (http://bit.ly/1Jesiem)
"Discussions are ongoing and may or may not result in such atransaction being agreed," UTV Media said in a statement.
An ITV spokesman declined to comment on what he termed asspeculation.
UTV Media, which launched as Ulster Television in 1958,forecast in June a deeper-than-expected full-year loss at UTVIreland, its new Republic of Ireland channel, as audience growthstalled.
Peel Hunt analyst Alex Degroote said a sale could fetchbetween 100 million pounds and 125 million pounds ($156 millionand $195 million)
UTV's television division, which operates in both NorthernIreland and the Republic of Ireland, accounted for 36 percent ofits revenue last year, according to Thomson Reuters data. Mostof the company's revenue comes from radio.
UTV Media warned in June that its channel in the republicfaced a loss of 11.5 million pounds, nearly double the 6 millionpounds it had forecast in March, and said it had a plan toaddress the audience shortfall.
"UTV is losing a lot of money in its Republic of Ireland TVbusiness. That is putting the Plc balance sheet under a lot ofstrain. And therefore, we have been thinking for a little whilethat the company needed a solution to this problem," Degrootesaid.
He added that UTV has a close working relationship with ITVPlc because of shared programming and probably approached themuch larger broadcaster.
UTV shows ITV programming as an owner of the Channel 3franchise in Northern Ireland and runs shows such as "LesserSpotted Ulster".
A sale to ITV was expected to be confirmed this week andwill mark the first time the TV channel would pass out of localcontrol since it was set up, the Belfast Telegraph said.
ITV's shares were down 1.9 percent at 0921 GMT on the LondonStock Exchange on Monday, amid a wider selloff that sent theFTSE-100 index down as much 3 percent.
UTV shares were up 9.2 percent.
($1 = 0.6384 pounds) (Editing by Anupama Dwivedi)
