Sharewatch Special – The TV Market
The second half of 1996 was a turbulent one for the TV sector with most broadcasters experiencing fluctuations in share price as the market geared itself for the relaxation of cross media ownership rules which came into law in November.
While much of the takeover talk failed to materialise the interest it created in the market usually edged prices higher. Possibly the biggest speculation centred around Yorkshire Tyne-Tees Television with Granada, United News & Media and Carlton all expected to mount a bid. This lead to the fluctuations which can be seen around July and August with prices rising as expectation grew and then falling when the market became frustrated at the stalemate. It was around November however that, with the passing of the Broadcasting Act 1996, YTTV really began to move on the back of takeover talk. Granada emerged as the most likely suitor and YTTV’s price rocketed to a new high of £13.15 per share.
Most of the other broadcasters, especially HTV and STV experienced similar, though less dramatic, price changes. Both United News & Media and Carlton were rumoured to be taking an interest in HTV, with UNM buying an extra stake in the West of England broadcaster at the end of October. Whilst this steadied the fluctuating HTV price for a time, it also reminded the market of other possible buy-outs. STV declined for failing to make a move on Grampian while Granada and YTTV continued to play their courting game. The acquisition of Westcountry TV by Carlton in November sent Carlton’s price higher and again renewed interest in the sector.
BSkyB would probably rather forget the closing months of 1996. After reaching a high of over 600p in October as a result of Rupert Murdoch winning a court case in Australia to launch a Super League rugby competition, it was soon hit by a double-whammy which sent the price on a downward slope for the rest of the year: the creation of a communications giant by the alliance of Cable & Wireless with Nynex and Bell Cablemedia at the end of October put BSkyB in a weak position which was further heightened by a huge cash raising exercise by Rupert Murdoch which effectively meant he was mortgaging his BSkyB shares. The share price dropped to around the 500p mark and remains there at the moment.
The situation is unlikely to change much over the coming months, with YTTV, HTV and Grampian still the talk of the City in terms of takeover targets. While they remain “independent” the price fluctuations of late 1996 are set to continue.