Granada pours scorn on LWT white knight: Television company rubbishes rumour of plan to sell 29% stake to US West

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The Independent Online
GRANADA yesterday scorned reports that its bid target, broadcaster LWT, was in talks with US West, the US telephone company.

LWT is apparently hoping that US West, which has a half stake in the UK cable company Telewest, will take a 29 per cent stake in the capital's weekend television station, frustrating Granada's ambitions.

A Granada source said: 'One minute it's Yorkshire Tyne-Tees, the next minute Disney and the next US West. We don't put much credence in it.' LWT and US West declined to comment.

Analysts were also sceptical about the idea, saying it was difficult to see the benefits to US West, which would have to pay a high price for a non-controlling stake.

US West would find LWT's programming side useful to supply its cable interests, but it is questionable if it could justify the price it would have to pay to defeat Granada's bid, given that it would be limited to a minority stake.

British law prevents non-EU companies from taking a stake of more than 30 per cent in a UK television company, a ban reaffirmed yesterday by the Independent Television Commission, the industry regulator.

The price of the two companies shares see-sawed, with both eventually ending up 1p, Granada at 552p and LWT at 668p.

Any deal with a white knight would have to be put together very swiftly. On Friday, the 39th day of the bid, the Takeover Panel agreed to stop the clock until two days after the Office of Fair Trading had published its verdict on the acceptability of the current bout of television company bids.

But once the clock re-starts, LWT would have to produce any white knight within a week. Granada's bid will run until day 60.

There are signs that it may not be long before the clock begins ticking once more - the OFT was due to send its recommendation to the Department of Trade and Industry yesterday.

It is expected to advise clearing the bid, despite advertisers' worries that mergers will increase the bigger broadcasters' bargining power.

To meet their concerns, the OFT is expected to insist that Granada should abandon the deal under which LWT sells YTTV's airtime.