Euro Media Firms Eye Granada as Shares Sink

25 June 2001

British commercial television company Granada Media – suffering a slump in its ad revenues and a downturn in its share price – has been approached by several European media firms, according to a letter from chairman Charles Allen to prime minister Tony Blair leaked to the Sunday Times.

The letter, thought to be authentic, called for the government to implement the deregulation of the media sector – a subject dropped from the recent Queen’s Speech outlining forthcoming legislation [WAMN: 21-Jun-01] – which would allow Granada to merge with Carlton Communications. The duo between them own 90% of the commercial ITV network.

The leaked correspondence also voiced concerns that, as things stand, Granada is vulnerable to a takeover. “If we lose our independence the price could be high,” warned Allen. “As you know, ITV invests around 1 billion pounds in programs per year, sustaining 5,000 jobs.”

A takeover would also be bad news for OnDigital, the terrestrial digital broadcaster owned by Granada and Carlton which is soon to be renamed ITV Digital. “The plans tabled by the European companies who have approached us do not feature OnDigital,” revealed the letter. “These companies consider that a retreat from the platform would be well received by the market.”

News source: Wall Street Journal