Carlton Communications Plc has moved to buy Central TV, with a bid worth £26 per share. This values Central at £758m and the bid has been recommended to Central’s share holders.
The deal would create the biggest ITV firm in Britain. It is the first such bid following the Heritage Secretary’s announcement last week of the relaxation of takeover rules.
The ITC’s rules that no individual ITV sales operation can offer for sale more than 25% of ITV’s total revenue have not been affected by last week’s announcement and continue to apply. The merging together of Carlton and Central would mean that their joint revenue on October figures has a share of higher than 30% of the ITV total. In this case, they would have to continue selling separately, the ITC told MediaTel this morning. This 25% ruling is due to be reviewed in 1994.
Michael Grade, in a letter to the FT this weekend urges for this 25% rule not to be undermined, as he sees it as the only protection advertisers have to ensure fair trade.
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