US Investor Linked With ITV Acquisition

According to a report in the Sunday Times, the US billionaire Haim Saban and the private equity group Apax Partners have a well-advanced plan to buy into ITV. Also on board is Neil Blackley, the former head of media research at Merrill Lynch, who is believed to be assembling a special team to support a bid.

Saban, who built his fortune in children’s entertainment, has long harboured a desire to acquire European media assets and his interest in Carlton and Granada will have heightened following the failure to capture Kirch Media in Germany (see Kirch TV Deal Hits The Rocks).

Until now, non-EU investors have been precluded from owing UK media assets but the Government plans to relax ownership regulations in the forthcoming Communications Bill (see Jowell Moves To Defend Foreign Ownership Deregulation). The issue remains a contentious one and fears have been voiced that foreign ownership of broadcasters could lead to a fall in programming standards (see Viacom Eyes Prospect Of ITV Takeover).

However, there is as yet no guarantee that Carlton and Granada will end up in overseas hands. Apax is thought to have been discouraged by the rising share prices of the ITV companies and much could rest on whether the long awaited merger goes through (see ITV Merger ‘May Not Go Ahead’ Finds Morgan Stanley).

Sources claim that a disagreement over programming budgets is responsible for rising tension between the ITV partners. Carlton is perturbed by forecasts showing that advertising revenues could be down by as much as 20% in June (see Merrill Lynch Cuts ITV 2003 Airtime Revenue Forecasts) and is considering spending cuts. However, figures are skewed because of adspend during last year’s World Cup and Granada, which has a larger production unit, is calling for an increase in investment.

Neither Carlton or Granada has so far commented on the takeover speculation. Shares in the two companies stood at 139.5p and 87.5p respectively at 12.45 today.