Carlton wins TV battle

Late pounds 85m bid snatches Westcountry Television from United
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The Independent Online
Carlton Communications has won control of Westcountry Television with an pounds 85m agreed bid which sweeps the Plymouth based ITV franchise from under the nose of United News and Media.

The City had been expecting UNM to seal a two month courtship of Westcountry this week but Carlton intervened with its cash bid late on Thursday night. It was irrevocably accepted by 77 per cent of the private company's shareholders yesterday.

The Carlton bid is understood to be around 10 per cent higher than UNM's final offer.

Carlton has been tracking Westcountry since the franchise was put on the auction block in the summer. It exploited UNM's prevarication to become the first television company to take advantage of the relaxation of TV ownership rules.

Carlton became the first company to own more than one franchise when it snapped up Central Television in 1993. It has used the new ruling that TV companies can own up to 15 per cent of the national audience to add Westcountry to its portfolio. The deal increases Carlton's share of the national audience by one percentage point, taking it to around 11 per cent.

The takeover will also bring an pounds 8m bonus for Westcountry staff who are members of the company's long term incentive plan. Carlton has included the amount as part of its consideration to buy out a plan which is weighted towards executive management.

Michael Green, chairman of Carlton, said: "Westcountry is a successful company and we will build on its strengths."

The deal was also welcomed by Stephen Redfarn, Westcountry's chief executive: "I know that Michael Green and his team admire the record we have built in a short time. In the circumstances the company could not be in better hands."

Mr Redfarn is particularly pleased that Carlton has agreed to honour the full contractual entitlements of the workforce.

In 1995 Westcountry generated pounds 33m of advertising revenue. The acquisition will take Carlton's share of national ITV ad revenue to 34 per cent.

Westcountry's airtime sales are handled by TSMS, UNM's advertising sales house. UNM's interest in Westcountry was in part accounted for by its wish to shore up TSMS, which sells airtime for UNM's Meridian and Anglian TV subsidiaries as well as HTV.

TSMS currently holds 25 per cent of the ITV advertising market, and is keen to maintain its buying power in the face of large rival sales houses owned by Carlton and Granada.

There is speculation that UNM will turn its attention to HTV, where it acquired a 20 per cent stake earlier this month. A full bid would value HTV at up to pounds 400m, allow UNM to expand its TV interests and consolidate HTV's relationship with TSMS.

Last week UNM issued pounds 180m of bonds, billed by the company as "a housekeeping exercise" to improve the quality of its debt, but seen by analysts as a war-chest to chase more television deals.

The company has a 14 per cent stake in Yorkshire Tyne-Tees Television, worth around pounds 110m, which it is expected to sell when Granada, with 27 per cent of Yorkshire, announces its long-awaited bid for that company.

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