United to back Granada's offer

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The Independent Online
Granada, the television and leisure group, is aiming to table its formal offer for Yorkshire-Tyne Tees Television as early as Monday, according to industry sources. Yorkshire is expected to win the backing of United News & Media, which has a 14 per cent stake in the television company, although large institutional shareholders are still promising to vote against the bid proposals, writes Cathy Newman.

One industry source said Lord Hollick's United would back the Yorkshire deal, which would be formally placed next week. However, it is thought Granada may be persuaded to offer marginally more than the pounds 11.75 a share originally outlined almost two weeks ago.

Although United's support would allow Granada and its chairman Gerry Robinson to push ahead with its plans, institutional shareholders are still dissatisfied. One shareholder planning to oppose the bid said yesterday: "We can't identify any major institutional shareholders willing to back the deal at this price." The company, which expressed surprise that Granada had not yet made any further public disclosures about the deal, added it had contacted Yorkshire about its grievances but calls had not been returned.

Institutions which have substantial shareholdings in Yorkshire include Mercury Asset Management, which has been fairly public about its disappointment with Granada's offer, Schroder Asset Management, Barclays Global Investors, LGT Investors, Royal Sun Alliance and Fidelity.

If Granada succeeded in buying United's shares in Yorkshire, analysts say it would become increasingly likely that Lord Hollick's newspaper to television conglomerate would make a bid for HTV by the end of the year.