Carlton and Granada wait on TV merger decision

ITV groups Carlton and Granada were expected to find out today whether their long-awaited £3.8bn (€5.4bn) merger would be given the go-ahead.

ITV groups Carlton and Granada were expected to find out today whether their long-awaited £3.8bn (€5.4bn) merger would be given the go-ahead.

The pair, which between them control 12 of the 15 ITV franchises, are hoping that Trade and Industry Secretary Patricia Hewitt will agree to the creation of a single ITV.

Shares in the broadcasters soared amid speculation that the move could happen with minimal strings attached.

The Media Guardian website reported that the decision was due at 11am.

The British government is thought likely to approve the deal, but it could force the pair to sell their advertising sales operations to allay fears a merged broadcaster would have excessive power to increase prices.

Such an option could potentially scupper the tie-up, but reports suggested the British government could opt for a compromise solution controlling prices without forcing the disposals.

Shares in the two companies leapt in morning trading on Monday with Granada topping the FTSE 100 risers list, up 5% at 103p.

Meanwhile Carlton led the second tier FTSE 250 Index with its shares trading at 181p – up almost 9%.

Commentators said the rises reflected optimism the British government would stop short of ordering a sell-off.

It could agree to compromises such as auctioning off airtime or allowing advertisers to extend current contracts on the same terms with the right to reduce the amount of airtime if ITV’s audience share declines.

Under the proposed tie-up, Granada would take a 68% stake in the new dominant ITV company better placed to take on the might of satellite broadcaster BSkyB and the BBC.

* Granada owns seven ITV franchises including Granada Television, London Weekend Television, Yorkshire Television, Tyne Tees Television, Anglia Television, Meridian Broadcasting and Border Television.

Carlton Television owns the licence in five regions – London & LNN, Central, West Country, HTV West and HTV Wales. Its content division has made programmes including Inspector Morse and Survivor.

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