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.