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Bertelsmann Looks At Carlton Merger, Says Report

Bertelsmann Looks At Carlton Merger, Says Report

German media group, Bertelsmann, may be interested in making a takeover bid for the UK’s Carlton Communications, according to a report in yesterday’s Observer newspaper. The article claims that the two companies have held ‘informal discussions’ recently, but that there are no ongoing negotiations.

Bertelsmann is currently prevented from tying up with the ITV giant, or indeed any UK television company, due to the Government’s ownership restrictions. The company already holds a 70% stake in pan-European broadcaster RTL Group, which in turn has a 65% holding in the UK’s Channel 5. However, these ownership constraints are expected to be relaxed next year under proposals by the Government, potentially paving the way for Bertelsmann to enter the UK media market.

An approach to Carlton by Bertelsmann would almost certainly set off a bidding war between the other ITV giant, Granada. A Carlton-Granada merger has long been seen as the final hurdle toward the consolidation of ITV into a single entity.

Carlton is currently an attractive prospect for potential buyers as its share price has plummeted over recent months due to the downturn in the advertising market (particularly television) and concerns surrounding the prospects for ITV Digital (see ITV Digital Reduces Costs And Grows Subs 36% In Q3).

RTL has declined to comment on the Observer‘s report, which also claimed that Bertelsmann might be looking at moves into the UK radio market.

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