Government proposals to relax ownership rules for Britain's television companies sparked a City share-buying frenzy yesterday as speculation mounted of a media takeover war.
Share prices in many smaller ITV companies rose sharply after Virginia Bottomley, the Secretary of State for National Heritage, announced yesterday that a new Broadcasting Bill would no longer restrict television companies to just two ITV licences. It will be replaced by a more flexible limit of 15 per cent of audience share.
The Bill, which goes beyond earlier expectations, effectively clears the way for some media groups, including Granada, Carlton and MAI, to try to snap up smaller companies. When the Bill is enacted in the new year Carlton and Granada, who share 16.6 per cent of total audience, will be able to acquire other ITV companies, hugely expanding their power.
Mrs Bottomley said yesterday: "Our proposals will liberate British broadcasters to become world leaders."
Shares in some likely targets rose dramatically. Ulster TV added almost pounds 100m to its market value of pounds 1.3bn as shares rose 68p to pounds 10.23. The value of HTV rose by about pounds 25m to about pounds 260m, as shares rose from 269p to 302p. Grampian rose 16p to 219p, adding pounds 5m to its pounds 66m market value.
However, shares in potential predators for some of the smaller companies remained flat or dipped. Carlton, which already owns Central and has stakes in two others, was down 18p to 958p, and MAI fell 9p to 310.5p.
A Carlton Communications spokesman nevertheless described the proposed Bill as "very good news for the industry". He declined to say whether his company would be preparing bids for any others.
Cross-media ownership rules are also relaxed. Television companies will be able to own newspapers totalling up to one-fifth of national circulation, while newspaper groups can own ITV or Channel 5 licences, subject to the 15 per cent rule.
This is good news for Associated, which owns the Evening Standard and Daily Mail, United, which owns the Express newspapers, and Telegraph plc. Mirror Group - which has the Independent and the Daily Mirror - and News International, which owns the Sun, News of the World, Times and Sunday Times, lose out. Both control more than one-fifth of national circulation.
Liberalising Bill, page 9
Takeover war, page 18
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