The chairman of British TV group Granada has for the first time conceded that the company’s merger with Carlton Communications could still go ahead if regulators insist they sell off their respective ad sales houses.

Writing in The Times, Charles Allen declared: “If the government requires divestment of both sales houses, we will have to look very carefully to see if we can make that work.”

The two firms – dominant shareholders in terrestrial television network ITV – are eager to merge, but the resulting ad sales operation would control over 50% of Britain’s TV ad market.

Previously, Allen blasted calls for the divestment of ad sales units as a “step backwards, while Michael Green (his counterpart at Carlton) threatened to abandon the merger if regulators made this the price of approval.

But despite retreating from such threats, Allen insists that getting rid of the sales houses would “significantly undermine the rationale” of the deal – namely, to enable ITV to compete in a multichannel era.

Trade and industry secretary Patricia Hewitt is expected to deliver her verdict on October 6.

• Separately, both Green and Allen dismissed talk of a post-merger takeover by US investors.

It emerged at the weekend that Viacom boss Mel Karmazin and Mighty Morphin’ Power Rangers entrepreneur Haim Saban had expressed an interest in buying the combined Granada/Carlton [WAMN: 22-Sep-03].

Speaking at the Royal Television Society conference, Allen played down the rumours: “From our perspective we have got a lot of growth to come. I think shareholders will want to see that they get their share of that value rather than give it away.”

Green, meanwhile, put it more curtly: “I don't think it is even on the cards.”

Data sourced from: multiple sources; additional content by WARC staff