The Government yesterday gave a bright green light to the current wave of mega media mergers when it said that the pounds 3bn marriage of United News & Media and MAI would not be referred to competition authorities.
The merger, which has been approved by United's shareholders, is now awaiting acceptance by shareholders of MAI, the nominal takeover target under the structure agreed for the deal.
An MAI spokesman said yesterday: "We are very encouraged by the level of acceptances, and are very comfortable that the merger will go through within the next few weeks."
The announcement from the office of Ian Lang, the President of the Board of Trade, was further confirmation of the Government's intentions to encourage a wholesale consolidation of the newspaper, television and radio markets, with the aim of creating British media "champions" able to compete globally.
The merger of Lord Stephens' United publisher of the Express newspapers and Lord Hollick's MAI, owner of the Meridian and Anglia ITV licences, was unveiled early last month, in advance of the passage of the new Broadcasting Bill, now being debated in the House of Lords.
Under the new, relaxed rules, newspaper publishers and television companies will be able to own each other, in a bid by the Government to give British companies the same advantages that already accrue to global media players such as Rupert Murdoch's News Corporation.
MAI and United unveiled their merger months before the new rules were scheduled to be passed into law. The two companies used a controversial "warehousing" structure under which UBS, the merchant bank, would control 50 per cent of a company set up to hold the Express newspaper titles, thereby permitting MAI and United to avoid the current ban on cross-media ownership.
The warehousing concept has been used by other media companies to get around ownership rules, most recently by Granada, which took its stake in the ITV licence holder Yorkshire-Tyne Tees to 25 per cent last month.
The Government yesterday approved the MAI-United warehousing scheme as well, a decision that is likely to encourage other media companies to use similar shareholding structures.
The spotlight has shifted to Carlton Communications, Michael Green's media company. It had been tipped to make a merger-busting bid for MAI, following a pounds 1.8bn debt-raising exercise last month. But it has since ruled out intervention in the MAI-United marriage, and is expected to acquire one or more of the remaining "independent" ITV companies.
HTV, licence holder for Wales and the West, is a leading candidate for takeover, according to media analysts. Under the terms of the new Broadasting Bill, companies can control as many ITV licences as they wish, provided they do not control more than 15 per cent of the total television audience.
Carlton could easily buy HTV and still be left with room to expand further.
Scottish Television, which yesterday unveiled sharply higher profits for 1995, is also considered a takeover candidate. However, its future will depend on its two main shareholders, the US-controlled Flextech and Mirror Group, the publishing company that owns 43 per cent of the Independent. Sharply higher profits for 1995, announced yesterday, could revive speculation about the future of the Scottish company.
Comment, page 17
UK channels' viewing share
% of all viewing
12 months to 30/11/95
Channel 4 11.0
Tyne Tees 1.7
Cable and other satellite services 3.8
Source: ITCReuse content