City & Business: A TV dog's dinner

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The Independent Online
IT'S NEVER over until it's over, but at this juncture the game already looks to be up for London Weekend Television. In its attempt to see off Granada's pounds 670m hostile takeover bid, LWT seems intent on only one thing: repeatedly shooting itself in the foot.

First there was the mooted plan to acquire Yorkshire-Tyne Tees, a move so guaranteed to alienate shareholders because of its poison pill characteristics that it fell at the first hurdle. Apparently convinced that its conventional defence isn't working, LWT is now attempting to line up an American investor to come in as a 20 per cent shareholder in the hope this might help.

A belated rearguard campaign is also being mounted at the Office of Fair Trading to have the bid referred to the Monopolies and Mergers Commission, though with little hope of success. It all smacks of desperation.

LWT has been combing the world for potentially 'friendly' investors to block Granada's bid; it has been talking to everyone from Rupert Murdoch downwards. I guess it's always possible that someone with more money than sense might come along, but it's hard to believe anyone can match Granada's terms - 35 times cash flow. They only work for Granada because of the cost savings it can achieve by merging the two TV stations.

The way things are going, Gerry Robinson, chief executive of Granada, won't even have to sweeten his share swap terms to succeed. A little bit of tweaking at the edges, such as making the new Granada shares qualify for a dividend, and an improved cash alternative should do the trick.

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