United News & Media has sold its television interests to Granada Media, finally sealing consolidation within ITV. The deal will make Granada Media the undisputed leader of Britain’s main commercial TV channel.
It will take control of United’s television interests – its Meridian, Anglia and HTV franchises -, together with all related production and international distribution businesses. The deal is not believed to include the group’s 35% stake in Channel 5, however.
Lord Hollick, CEO of United, will retain control of the group’s newspaper, business magazines and internet assets. Earlier in the week there were rumours that Hollick was asking more than £2.2bn for the group’s TV assets (see United Completes Divestment As Rivals Prepare For Carve-Up), but the final price was set at £1.75bn. It is believed that if Hollick had refused Granada’s offer, Gerry Robinson, CEO of Granada, was prepared to put forward a £5bn hostile bid for the entire company.
Commenting on the acquisition, Charles Allen, chairman of Granada Media, which was listed as a separate media group earlier this month (see Granada Media Begins Conditional Trading), said today: “This deal delivers on the strategy we outlined during our IPO on every front. It increases our national footprint, strengthens our offering to advertisers and allows us to play a leading role in ITV.”
Under broadcasting rules which limit the share of the national viewing audience which one company can own to 15%, Granada will not be able to own all three of United’s ITV franchises as well as its own. It is expected to sell off the HTV franchise to Carlton, and one newspaper report has said that the sale has already gone ahead.
As a result of the deal, Granada Media has confirmed that it is no longer considering making a bid for Carlton. Granada was given the go-ahead to bid for either of its rivals by the DTI two weeks ago (see ITV Merger Ruling Abolishes 25% Advertising Revenue Limit). Conditions were imposed on the proposed merger between United and Carlton, however, and their deal collapsed last week (see United “In Talks” As Deal Collapses). United then put its TV assets up for sale, resulting in today’s deal.
Granada Media’s share prices rose 32˝p to 620p as the news emerged this morning. United was down 93˝p – a fall of almost 10% – to 851˝p and Carlton shares fell 51˝p to 772p.
Granada Media: 020 7620 1620 United News & Media: 020 7921 5000 Carlton Communications: 020 7663 6363
