ITV Merger ‘May Not Go Ahead’ Finds Morgan Stanley
The Competition Commission today outlined a number of potentially key sticking points in the proposed merger of Carlton Communications and Granada into a single ITV company (see Carlton And Granada May Have To Sell Sales Houses). In letters to the two companies, the regulator laid down a number of hypothetical remedies which may open the way for the merger should it be found to be against the public and competition interests.
The broker says that conversations with key industry figures over the last few weeks have yielded the view that the merger may not go ahead. Analysts at Lehman Brothers have also indicated that the merger is unlikely to be permitted with a combined sales house (see ITV Merger Unlikely With Combined Sales House, Says Lehman Brothers).
It is widely accepted now that Carlton and Granada will have to make conciliations over the sales house issue. One of the Commission’s remedies is that the operations could be sold and run as independent entities.
Morgan Stanley also claims that not too much should be read into the Competition Commission’s document, adding that the regulator is keeping its cards close to its chest.
Shares in Carlton were down by 2.1% at 103.75p and Granada was down by 0.4% at 68.75 by 11.30am today.
