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Carlton and Granada revive merger talks

The UK's ITV giants Granada Media and Carlton Communications have started merger talks for the second time this year, in an attempt to form a single ITV valued at £2.4bn.

Shares in Carlton and Granada leapt by 5% on the news, while the two companies have claimed that the dominance of BBC and BSkyB over the UK broadcasting sector should convince regulators that a single ITV was needed. The barrier on owning more than 15% of the commercial TV audience is due to be removed if and when the new communications bill is introduced at the end of next year.

The boards of Carlton and Granada are {in advanced discussions{ over a merger of the two companies and have already agreed that Granada shareholders will receive 68% of the equity and £200 million in cash on completion. Carlton shareholders will receive 32% of the equity, upon completion, potentially increasing to 34% in 2006 dependent on earnings.

Following completion, Michael Green will become chairman of the merged group and Charles Allen will be chief executive. Green, chairman of Carlton, said: {Delay is not in the interest of viewers, advertisers, stakeholders or the future of British broadcasting.{

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