Shares in Granada and Carlton Communications have dropped after more bearish news on TV advertising revenues and concerns about their share prices expressed by Granada's chairman in a leaked letter.
Granada fell four per cent to 142p in early London trade, while Carlton slipped three percent to 323-1/2p, having touched a near seven-year low of 320p.
The two companies are major shareholders in commercial network ITV and jointly run terrestrial digital platform ONdigital, due to be renamed ITV Digital next month.
Both stocks extended recent slides as widespread worries about a sharp downturn in their advertising income have come home to roost.
Media planning and buying agency Zenith Media warned today that Britain's advertising market would suffer its first annual downturn since the early 1990s recession, and the Financial Timessaid ITV would see an 8.9 per cent slump in 2001 - its worst since British commercial TV started 50 years ago.
And a leaked letter from Granada chairman Mr Charles Allen to the British government offered few reasons for optimism about ITV fortunes. Mr Allen warned in the letter last week that any delay to new legislation on media ownership could hurt shares in the two companies, which are widely expected to merge.
"The current share price incorporates a consolidation premium, which is based on the perceived value of a consolidated ITV company. They will become cheaper still and more vulnerable if there is a block on that consolidation," he wrote in a letter prior to the Queen's speech last week, the Sunday Timessaid.
The letter said the share price weakness had led to several approaches from potential European buyers. No suitors had emerged, but the newspaper said potential buyers could include TF1, Mediaset and RTL.