Carlton Defies Shareholders Over Calls To Oust Green
Carlton Communications has defied calls from a powerful group of institutional shareholders for Michael Green to be removed as chairman of the newly merged ITV by noon tomorrow.
However, following an emergency meeting yesterday, Carlton has vowed to stand by its chairman and will not comply with the demands from the coalition led by Anthony Bolton of American group, Fidelity.
The broadcaster claims that a radical change in management would be ‘highly destabilising’ and could threaten its planned £4.2 billion merger with Granada. It also claims that the current management team is best placed to improve viewing figures and early cost savings at a single ITV company.
Sir Brian Pitman, a senior non-executive director at Carlton, said: “This is not about individuals this is about the role of a well-respected group of non-executive directors to determine what is in the best interests of a company and its shareholders as a whole.”
He added: “We are talking about a management team which has successfully fought to secure a merger of supreme strategic importance to the UK television industry and which needs every support in order to ensure that merger delivers the benefits we all expect to see.”
It is understood that the plot to remove Green has been planned for several months by shareholders, who have become increasingly disillusioned with Green’s management style and his handling of the ITV Digital debacle (see ITV Digital Creditors Lose More Than £1 Billion).
Over the past few months Fidelity is thought to have approached a number of senior media figures for recommendations about who should replace Green. Some shareholders are also understood to be keen to oust Granada chairman, Charles Allen, but the coalition recently changed its tactics and decided to target Green alone.
Fidelity and its supporting shareholders – UBS Global, Asset Management, Morley Fund Management, Legal & General, Isis Asset Management, Deutsche Asset Management, Standard Life Investments and Schroders – own around 36% of Carlton and 33% of Granada.
Carlton’s refusal to comply with their demands means the shareholders now have no option but to either back down, or call an emergency meeting of the company to vote Green out of his position.
Reports suggest that if the shareholders ignore the unanimous view of Carlton’s non-executive directors they may resign en masse. This could throw both the company and the merger into uncertainty.
The Government’s decision to allow Carlton and Granada to merge without selling off their sales houses has received a mixed reaction from advertisers, who are concerned that a single ITV will exercise too much power in the television advertising market (see Advertisers Give Mixed Reaction To ITV Merger).
A new poll carried out for the Financial Times reveals that the majority of advertisers and media buyers fear that the creation of a single ITV sales house will drive up the cost of airtime (see Advertisers Fear ITV Sales House Will Push Up Airtime Costs).