Carlton to sell Zenith subsidiary

CARLTON Communications, the media conglomerate headed by Michael Green, will try to solve the niggling problem of how to get rid of Zenith Productions, the independent television producer in which it has a controlling stake, by selling Zenith's Action Time subsidiary for pounds 6m, writes Jason Nisse.

The Broadcasting Act states that a television broadcaster may not own more than 20 per cent of an independent producer.

Hambros, the bank acting for Carlton in the sale, is negotiating with two interested buyers for Action Time, which specialises in game shows and light entertainment programmes. A price of pounds 6m is expected.

The rest of Zenith is likely to be sold to the management, led by Charles Denton, for a few thousand pounds. The deal will end speculation over the future of Zenith, which is 51 per cent owned by Carlton and 49 per cent by Paramount, the United States group.

Paramount and Carlton had hoped that Zenith would be floated on the stock market, and Hoare Govett was approached. However, the marketing of Zenith has been hampered because it is loss-making. Action Time has been consistently profitable.

Though Zenith operates as an independent production company, its shareholding structure has meant that it is not considered an independent producer under the Broadcasting Act. In the past it has benefited from ITV companies licensing programmes to it to cut costs.