Granada attacks SMG over plans to pursue £225m takeover of Ginger

Click to follow
The Independent Online

Granada and Scottish Media were embroiled in an escalating war of words last night over the Glasgow group's determination to continue negotiations for a possible £225m takeover bid for Ginger Media, the privately owned radio and TV group controlled by Chris Evans.

Granada and Scottish Media were embroiled in an escalating war of words last night over the Glasgow group's determination to continue negotiations for a possible £225m takeover bid for Ginger Media, the privately owned radio and TV group controlled by Chris Evans.

Scottish confirmed it was in buyout talks with Ginger after Gerry Robinson, chairman of Granada, which owns 18.6 per cent of Scottish, criticised the possible link-up.

"As shareholders, we are very displeased," Mr Robinson said. "We need to be absolutely clear: at this price we don't back it." He added: "It's very hard to imagine that it would add shareholder value."

Don Cruickshank, the Scottish chairman, lashed out at Granada's intervention. "Granada's comments lack proper knowledge, are premature and are simply self-serving," Mr Cruickshank, the former telecoms regulator, said.

Should Scottish wish to acquire Ginger, it would require the approval of 75 per cent of its shareholders. Flextech, the multi-channel television operator, which holds 18.6 per cent of Scottish and has two board members, wouldn't comment, but is believed to be willing to consider a Ginger buyout.

Should Scottish agree a deal for Ginger, Granada's hopes to take over the number four ITV broadcaster would likely be dashed. Median ownership regulations prevent TV broadcasters from owning national radio broadcasting licences.

Charles Allen, Granada's chief executive, left it open to question whether his company would retain its stake in Scottish should a deal be struck for Ginger.

"In the event, they were to take over this asset at or around this price, then we would have to question whether we would have any present intention to have an investment with Scottish," he said.

The battle errupted as Granada unveiled a 14 per cent rise in year to September pre-tax profit to £835m before the cost of exceptional items and investment in ONdigital, the digital terrestrial broadcaster co-owned with Carlton Communications. Strong television advertising revenue gains in its three ITV franchises and a recovery in the hotel sector, particularly in London, led the profits gain.

Granada bought its stake in Scottish earlier this year from Mirror Group. Mr Robinson is anxious to absorb Scottish to guard Granada's number one position in the ITV sector.

Granada could buy out Scottish under current broadcasting advertising market share and viewership limits. But it would likely pay a hefty premium.

Comments