TV companies face pounds 2bn bid battles

MATHEW HORSMAN

Media Editor

Television companies are bracing themselves for pounds 2bn worth of bid battles that will change the face of Britain's television industry for years to come.

Eight ITV companies are named as leading targets, while Carlton and Granada are the likely predators. Betting on who will buy what has sent shares soaring over the past few months.

Top of the list of takeover candidates is HTV, licence-holder for Wales and the West, which has jumped by more than 20 per cent since the startof the year. In 12 months, the company's shares have soared to 347p from 141p. Close behind is Yorkshire-Tyne Tees, which closed last night at a record 818p, 17 per cent up since 1 January.

The frenzy is being fuelled by the Government's decision to relax rules governing media cross-ownership, unveiled late last year. Once the Broadcasting Bill is passed, possibly by the summer, companies will be able to buy as many ITV licences as they wish, provided no individual broadcaster ends up with more than 15 per cent of the total television audience.

The leading contenders to take over HTV are Carlton, the largest ITV company, and Scottish TV, which already holds a 20 per cent stake. The price tag could be even higher than HTV's current market capitalisation of pounds 300m, according to media analysts.

But Scottish itself is also a potential target, even if its share price has been slow to rise in recent months. Mirror Group, which has a 43 per cent stake in the Independent, owns 20 per cent of STV, as does Flextech, the cable and satellite programme packager. Flextech's chief executive, Roger Luard, is believed to be prepared to sell at the right price.

Also up for grabs are the small ITV players such as Border, Grampian and Ulster, which are together worth as much as pounds 275m. Granada is the leading contender for Border, which is adjacent to Granada's northern licence region

"The permutations are endless," said one TV chief executive. "Everyone is considering all the scenarios."

All told, said one leading analyst, "this is the biggest change in the independent sector since the Broadcasting Act of 1990."

Inevitably, ITV's near-monopoly on commercial advertising income is set to diminish, with the advent of the digital TV revolution and the growing penetration of cable and satellite services.

But the sector is expected to earn significant profits in coming years, particularly following consolidation. Analysts point out that the main advantage of takeovers in the sector is cost-cutting, particularly through shared sales and back office support.

Some analysts expect at most four big ITV groupings once the dust clears. These will probably include Carlton, Granada and MAI, perhaps rounded out by a "regional" group comprising Scotland, Wales and the small players.

Others advise against the hype, warning that the current prices of many ITV companies are unsustainable on fundamentals. Anthony de Larrinaga, media analyst at Panmure Gordon, said: "It is interesting that the share prices of the potential bidders are going down while the likely targets are going up. That suggests the market believes bidders will offer too much."

.A wild card is MAI, Lord Hollick's media and financial services conglomerate, which also holds a 15 per cent stake in Yorskhire-Tyne Tees. It has been widely rumoured to be looking for additional broadcasting opportunities.

But some analysts expect MAI to become a target itself, due to the market's growing love affair with demergers. "Certainly someone may come along and bid for the company, and then sell off the money-broking arm," said one analyst.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Night job: Pacha nightclub DJ, Joan Ribas, is the new kingmaker on the island
news
Arts and Entertainment
Nicole Kidman plays Grace Kelly in the film, which was criticised by Monaco’s royal family
film'I survived it, but I’ll never be the same,' says Arash Amel
Life and Style
Retailers should make good any consumer goods problems that occur within two years
tech(and what to do if you receive it)
Life and Style
healthIf one was missed, vomiting blood was seen as a viable alternative
Life and Style
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Guru Careers: Graduate Editor / Editorial Assistant

£16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...

Day In a Page

Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor
The ZX Spectrum has been crowd-funded back into play - with some 21st-century tweaks

The ZX Spectrum is back

The ZX Spectrum was the original - and for some players, still the best. David Crookes meets the fans who've kept the games' flames lit
Grace of Monaco film panned: even the screenwriter pours scorn on biopic starring Nicole Kidman

Even the screenwriter pours scorn on Grace of Monaco biopic

The critics had a field day after last year's premiere, but the savaging goes on
Menstrual Hygiene Day: The strange ideas people used to believe about periods

Menstrual Hygiene Day: The strange ideas people once had about periods

If one was missed, vomiting blood was seen as a viable alternative
The best work perks: From free travel cards to making dreams come true (really)

The quirks of work perks

From free travel cards to making dreams come true (really)
Is bridge the latest twee pastime to get hip?

Is bridge becoming hip?

The number of young players has trebled in the past year. Gillian Orr discovers if this old game has new tricks
Long author-lists on research papers are threatening the academic work system

The rise of 'hyperauthorship'

Now that academic papers are written by thousands (yes, thousands) of contributors, it's getting hard to tell workers from shirkers
The rise of Lego Clubs: How toys are helping children struggling with social interaction to build better relationships

The rise of Lego Clubs

How toys are helping children struggling with social interaction to build better relationships
5 best running glasses

On your marks: 5 best running glasses

Whether you’re pounding pavements, parks or hill passes, keep your eyes protected in all weathers
Joe Root: 'Ben Stokes gives everything – he’s rubbing off on us all'

'Ben Stokes gives everything – he’s rubbing off on us all'

Joe Root says the England dressing room is a happy place again – and Stokes is the catalyst
Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

Please save my husband

As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada