Turner expected to join ITN bid

Click to follow
The Independent Online
TED TURNER'S Atlanta-based Cable News Network is set to join the consortium of media companies making a pounds 30m rescue bid for Independent Television News.

At the same time, Sir Bryan Carsberg, Director General of Fair Trading, is expected to investigate the offer which is being led by Michael Green's Carlton Communications.

The move, which could lead to the package being referred to the Monopolies and Mergers Commission, comes as the consortium, which is made up of Carlton, LWT, Central and Reuters Holdings, will see CNN coming in as a fifth partner. CNN's involvement is expected to be revealed tomorrow when the proposal is discussed by the 15 ITV companies.

An adviser to one of the consortium members said: 'CNN makes great sense as there are economies of scale to be had between ITN and CNN. It runs a massive international network which loses money outside the US, and there is a great deal of duplication between it and ITN.'

Two other US groups - ABC and CBS - were rumoured to be interested in rescuing ITN, but failed to strike a deal.

The consortium will face an uphill struggle to have the plan passed by the regulators. Though the Independent Television Commission has said it has no objections, it will require the combined shareholdings of Carlton, Central and LWT to be cut to 49 per cent by the end of 1994 to comply with the Broadcasting Act.

'There is lobbying to have this limit lifted but, if it is not, we have a mechanism for placing the shares,' said Jonathan Klein, a director of Hambros Bank, which is advising the consortium. A spokesman for the Office of Fair Trading said on Friday: 'We will be looking at the deal under the merger arrangements.'

The OFT is concerned about two issues. First, Sir Bryan has noted the increasing concentration of power within a few hands at ITV, and is concerned that Carlton and LWT, which each own 20 per cent of the new breakfast service Good Morning TV, and Central, which owns 20 per cent of Meridian TV and in which Carlton has a 20 per cent stake, are getting together to control ITN.

The OFT will want to be convinced that Carlton, LWT and Central are not acting as a cartel within the ITV network.

Second, the OFT is concerned that ITN will be controlled by two of the main providers of television news. Reuters owns Visnews, which was expected to rival ITN for the contract to supply ITV with news, while Carlton and LWT are setting up a joint TV news company, called the London News Service.

The plan is that each of the five partners would put up two instalments of pounds 3m to fund ITN, which is losing around pounds 6m a year, over the next five years. They would each end up with a 20 per cent stake in the maker of News at Ten and Channel 4 News.

The deal is conditional on it being accepted by at least 75 per cent of the ITN shareholders, and on ITV accepting ITN's offer to provide news for it at a cost of pounds 53m a year, a pounds 6m reduction on this year's budget.

So far only one shareholder, Yorkshire Tyne Tees TV - which owns 14.4 per cent of ITN - has indicated that it will reject the consortium's proposals but it would only take one other large company, or two small ones, to join Yorkshire to scupper the deal.

(Photograph omitted)