United News & Media snaps up HTV option

United News & Media fired the starting gun yesterday on the long-awaited next-round consolidation of Britain's commercial television sector. As expected, it exercised an option to buy a 20 per cent stake in Welsh ITV contractor HTV on the first day of new industry ownership regulations.

United bought the stake from Scottish Television on the day the Government eased regulations that for the first time allow companies to control more than two ITV licences. Provided a single company does not control more than 15 per cent of the total television audience in the UK it is now free to own as many franchises as it wishes.

Following the exercise of its call option at 420p, United said yesterday it had no plans to make a full offer for the whole of HTV. The stake was only an investment, the company said.

That has not stopped shares in a handful of television companies rising sharply recently in anticipation of further bid action in the sector. Favourites to be snapped up in the expected carve-up include Yorkshire- Tyne Tees, up 15p to 1,282.5p yesterday and more than twice its level a year ago. Others on the block are Grampian, Border, Westcountry and Scottish.

Dealers continue to expect takeover action despite many analysts believing share prices are unsustainably high after recent strong runs. HTV, which closed unchanged last night at 378.5p, is worth over pounds 330m while Yorkshire, which Granada is thought to be circling, could fetch as much as pounds 800m.

United's move on HTV is expected to prompt a response from Michael Green's Carlton Communications.

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