Granada's bid for Yorkshire goes ahead

Granada yesterday accelerated the consolidation in the television industry by launching an agreed pounds 711m takeover bid for the neighbouring Yorkshire- Tyne Tees Television.

The bid, which has been widely expected, is pitched at pounds 11.75 a share, which is considerably lower that the pounds 17 a share that Ward Thomas, chairman of YTTV, said the business was worth earlier this year. Mercury Asset Management, one of the main institutional shareholders in YTTV, refused to make any comment yesterday on the bid price after having expressed disappointment about Granada's offer only last week.

Mr Thomas said the price was justified because of the significant decrease in ITV's share of television revenue. ITV pulled in 5.5 per cent less advertising revenue for May this year, in part reflecting the launch of Channel 5. Across the spectrum, ITV companies netted pounds 148.8m for the month, down from pounds 157.3m in the same month last year.

Mr Thomas, who is being offered the chance to become chairman of Granada Media Group, said yesterday that he had moved to calm rumblings of discontent among some shareholders by visiting four big institutional shareholders last Friday - Mercury Asset Management, Royal Sun Alliance, Fidelity and Legal & General. Of these MAM was "most certain in their opposition".

Gerry Robinson, Granada's chairman who believes that all the ITV companies will have to merge to combat the growing competitive threat from satellite and from digital television, said he had not yet talked about the bid to Lord Hollick's United News & Media, which has a 14 per cent stake in YTTV.

However, Mr Robinson thought it unlikely that United would oppose Granada's offer. "It would be a tough challenge for United," he said. The City is not anticipating opposition from United.

Mr Robinson said there would not be huge cost-savings from the deal, but added that between 30 and 40 jobs were likely to go over the next eight to 10 months.

He expressed relief that the "wedding", which had been trailed for so long, was finally complete. "We've been engaged for such a long time, and we've even been living together," he joked.