Granada plays for higher stakes: TV group likely to pursue merger and enter the national lottery line-up

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GRANADA GROUP, which earlier this year spent pounds 360m buying the contract caterer Sutcliffe Speakman, signalled yesterday that it was preparing to acquire at least one of its rival Independent Television companies and make a bid for the national lottery to be launched next year.

Gerry Robinson, Granada's chief executive, said he believed that within a fairly short period there would be only three or four companies left dominating ITV and that Granada intended to be one of them. He also scotched speculation that Charles Allen, chief executive of Granada TV, would move to head the group's catering side and that Granada might sell its TV operation.

Granada is among the ITV companies pressing Peter Brooke, the Heritage Secretary, to make changes to the 1990 Broadcasting Act, which currently prevents any of the nine largest ITV companies from taking each other over.

The chairmen of all 15 ITV companies met Mr Brooke on Monday and he is due to decide in the next few weeks on what changes need to be made. It is expected that Mr Brooke will lift the restriction on mergers of the large ITV companies and will make the change before the end of this year, when the moratorium on outside companies taking over ITV groups ends.

Granada came close to striking a relationship with Yorkshire-Tyne Tees Television, which would have had Granada selling YTTV's advertising airtime and taking a 14 per cent stake in the group. In the end LWT struck a deal, though there were reports that Mr Allen made a last- minute attempt to save Granada's deal. Analysts believe that Granada has missed its chance with YTTV but that it will be in the market for one of HTV Group, Anglia or Scottish TV.

However, there is intense market speculation that one of the large ITV companies may bid for Central Independent TV, and Granada is one of the few companies that could afford it.

It now also appears that Granada will go ahead with a bid for the national lottery.

It emerged at the group's half-year results meeting yesterday that the TV company is to join Vodafone in a proposal put together by Hambros, the merchant bank. Granada and Vodafone are both expected to take a 35 per cent stake in the consortium, with another 10 per cent held by Hambros and 20 per cent by a US group, Automated Wagering. Granada TV would make the weekly TV programme in which the winning number is drawn for the multi- million-pound prize.

The consortium is set to face tough competition, with more than half a dozen groups expected to bid, including Rank Organisation, Ladbroke and a consortium put together by the merchant bank NM Rothschild.

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