Germans eye United

Bertelsmann, the German media giant, is believed to be ready to throw its hat into the ring in the great ITV shake-up, by making a bid for United News & Media.

Bertelsmann, the German media giant, is believed to be ready to throw its hat into the ring in the great ITV shake-up, by making a bid for United News & Media.

Sources close to Lord Hollick, UNM's chief executive, say that he believes the German group could become the surprise package in the greatest media shake-up Britain has known for a decade.

On Friday UNM in effect put itself up for sale after its merger with Carlton Communications, the owner of the Carlton, Central and Westcountry franchises, collapsed.

The deal, which was already on shaky ground because of management tensions, was torpedoed by the Competition Commission, which said that the duo would have to sell UNM's Meridian franchise if they were to merge.

UNM has put its three franchises - Meridian, Anglia and HTV - up for sale, as well as its stake in Channel 5.

The City is now waiting for a move by Granada Media, which is free to bid either for UNM, in which case it would have to sell the HTV franchise, or for Carlton, when it would have to sell the Carlton franchise.

Charles Allen, chief executive of Granada, said he had not yet decided which route he wanted to travel. "It depends on what options are available from Clive [Hollick] and at what price," he said.

Under Takeover Panel rules, Granada has to make its move by a week on Friday. Lord Hollick believes Bertelsmann is interested in the online businesses UNM has built up in its subsidiary Xilerate. These include internet editions of some of UNM's publications, such as The Express and Travel Trades Gazette.

On Friday, Lord Hollick made plain that he would not allow Granada to dictate the terms of any deal the two companies might transact.

In a memo to UNM staff, he said: "It is of course possible that Granada Media will choose to bid for United on the cheap during that process. All I can say is to you is that we will vigorously defend ourselves against any such attack."