Despite a general assumption within the UK media village that Carlton Communications and Granada Media, the power duo controlling Britain's ITV network, were planning to merge following the expected liberalisation of media ownership laws this summer, it was not known that they were currently engaged in detailed merger discussions.

All the more of a shock, then, was the tight-lipped announcement issued this morning [Wednesday] that the pair had terminated their covert negotiations: “Carlton and Granada have been in discussions regarding a possible combination of their businesses, in step with proposed legislative changes. The two boards have decided not to pursue these discussions.”

The decision leaves the door wide open to overseas predators – especially as the current status of their respective share prices, enfeebled by the adspend slowdown, make both groups highly vulnerable to a bid. German media behemoth Bertlelsmann is seen as the most likely contender, although few believe it would have an unopposed run.

It is not yet evident how the cessation of talks will affect the future of the pair’s troubled subsidiary unit ITV Digital. But it is clear who the market views as winner and loser in the cleaving: by 10.45GMT this morning Carlton shares had slipped by £0.575 to £2.2225 while Granada stock rose £0.0375 to £2.14.

Data sourced from:; additional content by WARC staff