Granada chief executive, Charles Allen, could follow Carlton’s Michael Green in being forced out by rebel shareholders unless he succeeds in improving the financial fortunes of the merged ITV over the coming months.
Allen has been earmarked to become chief executive of the ITV company that will result from the £4.5 billion merger of Carlton and Granada. The long-awaited deal was approved by the Trade and Industry Secretary, Patricia Hewitt, earlier this month (see
ITV Cleared To Merge With Sales Houses Intact).
However, Fidelity, which last week succeeded in ousting Green as chairman designate (see Green Relinquishes Role As ITV Chairman Designate), is understood to be amongst a group of investors threatening to remove Allen unless he improves cost savings at the company.
Shareholders believe that a merged ITV can deliver annual savings of around £100 million, which is almost double the £55 million figure agreed by Carlton and Granada during their merger negotiations.
Anthony Bolton fund manager at Fidelity has dropped a heavy hint that he expects Allen to be removed from the chief executive’s post. He told the Sunday Times: “We need a new chairman who can come in, have a clean-brush approach to the structure and strategy of the company going forward.”
Asked if he wanted the new ITV chairman to have a free reign to decide whether Allen is the right person to be chief executive, he said: “You are describing exactly the kind of chairman we want.”
Other fund managers who participated in the revolt against Green are understood to have said that Allen could be gone by Christmas.
Meanwhile, head-hunters are this week expected to begin the search to find contenders for the chairman’s job. Greg Dyke, director general of the BBC, and Sir Christopher Gent, the former chief executive of Vodafone, have reportedly emerged as the favourite candidates.
Green will be replaced by an interim non-executive chairman. Sir Brian Pitman, former chairman of Lloyds TSB and a senior non-executive director at Carlton, is widely expected to be offered the job.
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).
