Granada pre-empts TV merger proposal

Granada, the British media and leisure group which has interests in Ireland, yesterday pre-empted the merger plans of Carlton…

Granada, the British media and leisure group which has interests in Ireland, yesterday pre-empted the merger plans of Carlton Communications and United News & Media by revealing its intentions to bid for either one of its independent television (ITV) rivals.

In a clear signal that it will not give up its dominance of the ITV network without a fight, Granada asked the Office of Fair Trading, one of Britain's competition regulators, to register its interest in acquiring either Carlton or United.

The request will be considered in the context of Carlton and United's £8 billion sterling (€12.73 billion) merger, which was agreed last November.

The move, immediately rejected by both targets, is thought to increase the chances that the Carlton United deal will be referred to competition authorities.

READ MORE

Mr Charles Allen, Granada chief executive, said the company would not make a formal bid until any regulatory review was completed - a process that could run for several months.

He refused yesterday to specify which company was the preferred target.

Advisers to United and Carlton accused Granada of attempting to throw up barriers to their merger. But Mr Allen dismissed the suggestion, insisting that Granada would be better at managing both Carlton and United.

Granada faces the problem of breaching the law which prevents any one company from controlling more than 15 per cent of Britain's television audience.

Granada has 11 per cent of the national audience. With United, it would have 17.6 per cent. A merger with Carlton would bring this to 19.3 per cent.

Granada's move received a lukewarm reception on the London stock market. Carlton shares closed up 2.9 per cent to 573p sterling, while United shares fell 0.7 per cent to 792 1/2 p. Shares in Granada rose 4p to close at 585 1/2p.

Granada is being advised by Lazard Brothers. Warburg Dillon Read is acting for Carlton and Kleinwort Benson is advising United.