Granada Shares Top FTSE 100 as Intruder Bid Rumours Grow

17 March 2003

The financial bookies had a field day last week, with shares in Granada plc soaring on the strength of rumours that an outsider is poised to bid for the UK’s largest commercial terrestrial TV company.

At one point on Thursday, reported the Financial Times, Granada topped the FTSE leaderboard with a rise to £0.51 ($0.81; €0.75), up 12.1% on Wednesday’s London market nosedive. Friday saw a more modest 8.3% increase to £0.5525 before closing down at £0.5325.

Such a bid, if it comes about, could capsize the broadcaster’s planned merger with Carlton Communications, currently under investigation by the UK’s Competition Commission.

On the face of it a bid could come from any quarter, including non-media organisations, although few market-watchers think this likely.

Most prominent among the usual suspects is US media titan Viacom, whose chairman/ceo Sumner M Redstone had cosy chats with prime minister Tony Blair last fall [WAMN: 08-Nov-02] before more martial affairs occupied the latter’s thoughts. It is unlikely that the words ‘Granada’ or ‘Carlton’ went unuttered during their conversation.

Four days after the Downing Street meeting Redstone denied Viacom was poised to make an ITV-related bid – but Br’er Fox left the door wide open. “We continue to be intrigued, but we have no plans for an acquisition of ITV – or any other UK broadcast asset – at the moment,” he said. “But we’ll continue to monitor developments very closely. So, as they say in our business – stay tuned.”

Viacom is one of the few contenders unlikely to fall foul of the UK Competition Commission.

Data sourced from: BrandRepublic (UK); additional content by WARC staff