Media analysts said the pounds 73.6m raised from yesterday's sale of the HTV stake and an additional pounds 5.1m from STV's 5 per cent holding in ITN was likely to be used to expand further in media north of the border, in pursuit of STV's strategy to build an all-Scottish regional media company.
Gary Hughes, STV's finance director, said it was not the policy of the company to comment on market speculation. But he said: "We have had a good working relationship [with Grampian] and if anything did happen, it would not be a contested deal."
Grampian would be worth about pounds 100m, analysts calculated last night. That figure includes a premium on yesterday's market capitalisation of about pounds 87m associated with the ability of a combined STV-Grampian broadcaster to offer advertisers a pan-Scottish audience.
Meanwhile, United's purchase of the HTV stake, revealed in yesterday's Independent, will give Lord Hollick's newspaper and TV giant what one analyst called a "marker" in HTV, and could make it difficult for another bidder, particularly Carlton Communications, to make its own approach.
According to sources close to the deal, Carlton and Canwest, the Canadian broadcaster, both made offers for the HTV stake, which was widely seen as a likely platform for an eventual bid by one of the predator companies.
However, United formally confirmed yesterday it had no plans to make a full offer. Under Takeover Panel rules, the company will now not be able to bid for at least six months, barring an approach from a third party.
HTV's shares were up 19p at 392.5p in morning trading, settling back to 385p by the close. United's shares were down just 0.5p at 668.5, while Carlton lost 7p to close at 503.5p.
United said yesterday the transaction gave it several advantages that did not require full ownership to realise. "There are a lot of things we can do, like common news-gathering, closer relationships on overseas sales, and joint production," a spokesman said.
Analysts said the United move was initially defensive, and was aimed at preventing an approach from Carlton. They expect HTV to be bought, probably within six months to a year. Roger Laughton, director, broadcasting and entertainment, at United said: "If investing in your core business is defensive, then so be it. We have done something that is in the best interests of the company by investing in our core business of ITV."
The sale, which will be finalised by 1 November, the date on which liberal new cross-ownership rules under the Broadcasting Act come into force, would mark the beginning of a wave of consolidation in the sector, analysts predicted.
Westcountry, the ITV licence holder for the South-west, has already solicited bids ranging from just under pounds 40m to about pounds 80m, with HTV, Carlton, United and Canwest all in the race.Reuse content