Pull plug on Green now - Granada

Allen furious at last-minute attempt to save chairman's job; Carlton non-execs may stay on at ITV
Click to follow
The Independent Online

Granada last night demanded that Michael Green step down immediately as chairman of Carlton, its merger partner.

Not content to see Mr Green's humiliating accession to shareholder demands yesterday, when he agreed to give up his proposed role as chairman of the merged Carlton-Granada, sources at Granada insisted that he must go immediately.

The merger deal is yet to be completed, with the two companies now working to finalise the detail of the conditions attached to this month's regulatory clearance of the transaction.

One insider said: "Can you imagine putting together a merger with a very disgruntled and disenchanted chairman with a sore head still in place? Common sense says that it's not likely to be a good thing."

Shortly after the midday deadline set by rebel shareholders, the Carlton board agreed that Mr Green could not chair the new ITV plc. Shareholders had demanded that an independent non-executive chairman be appointed to head the board of the enlarged company.

Carlton's statement yesterday said Mr Green and the company's board "remain committed to the completion of the merger and intend to play a full and active role in this process". The £4.5bn deal is expected to be finalised early next year.

It is understood that Granada is furious that the Carlton side put forward some last-ditch compromise proposals to shareholders on Monday, without consulting Granada. The proposed concessions would have seen Mr Green take the role of chairman, as originally planned, but step back to a non-executive chairman role in 2005. A Granada source said: "They were trying to railroad us into this compromise position."

Last night, shareholders, led by Fidelity's Anthony Bolton, declared victory. A statement for the investor group, which came to represent more than half Carlton's shareholders, said: "This was always about a single issue - corporate governance and the group is delighted that its one request has been accepted."

Mr Bolton said that he was content that Mr Green would play no part in the merged company. He said that it was not a demand of shareholders that Mr Green go immediately.

The Granada board decided to side with shareholders on the chairman issue at a meeting on Monday night but made no announcement until 7am yesterday. At 6.30am Charles Allen, Granada's chairman, phoned Michael Green to tell him the bad news. It is understood that Mr Allen was "courteous but matter of fact" with Mr Green. The reaction of Mr Green is not recorded but it is thought he was expecting the worst.

Mr Green's position became untenable after he was abandoned by the Granada board. Some City sources allege that Granada had secretly backed the shareholder campaign to oust Mr Green for some time, though there is no evidence for this. In a statement, Granada said: "It is now clear to the board of Granada that there is a substantial body of opinion, amongst shareholders of both companies, in favour of the appointment of an independent, non-executive chairman of ITV plc.

"The board of Granada recognises that this is a matter of corporate governance and, furthermore, is determined that ITV plc should go forward with the full support of its shareholders; moreover, Granada is concerned that the present uncertainty should be removed as swiftly as possible."

Mr Green had been vigorously supported by Carlton's non-executive directors, including Sir Brian Pitman, the former chief executive of Lloyds TSB, and most vocally by John McGrath, the former chairman of Boots.

Mr Pitman, Mr McGrath and one other current Carlton non-executive director, Etienne de Villiers, are supposed to serve as non-executives on the board of the future ITV plc.

The battle between Carlton's non-executives and the company's shareholders was unprecedented. However, Mr Bolton said he saw no reason why these directors should not be part of the new board.

Speculation on the new chairman for ITV has centred on John Nelson, the former investment banker who spent many years as an adviser to Granada.

The corporate financier John Nelson is a front runner for the merged ITV company's chairmanship, according to the spread betting firm Cantor Index.


5/2 SIR CHRISTOPHER GENT, 55. Former chief executive of Vodafone.

5/2 JOHN NELSON, 56. Former chairman of the European investment business of Credit Suisse First Boston as well as vice-chairman of Lazards. Was an adviser on Granada's hostile bid for Forte.

7/2 GERRY ROBINSON, 55. Ran Granada for 10 years. Current chairman Charles Allen was his deputy.

5/1 PATRICIA HODGSON, 56. Outgoing chairman of the industry watchdog, the Independent Television Commission, which is being subsumed into Ofcom.

9/1 DAVID CHANCE, 46. Ex-deputy managing director of BSkyB and a Granada non-executive.

10/1 DAME SARAH HOGG, 57. Was political adviser to John Major. First woman to chair FTSE 100 company, at 3i.

12/1 DAVID DIMBLEBY, 64. Broadcaster.

12/1 LORD MELVYN BRAGG, 64. Broadcaster.

12/1 SIR DAVID SCHOLEY, 68. Chairman of the investment bank Close Brothers.

16/1 TONY BALL, 47. Outgoing chief executive of BSkyB.

16/1 MICHAEL GRADE, 59. Chief executive of Channel 4 for eight years, has also worked for the BBC and the former ITV station LWT.

16/1 BOB DIAMOND, 52. Executive at Barclays Bank.

20/1 DAVID ELSTEIN, 58. Was chief executive of Channel 5 for four years. Chairman of the British Screen Advisory Council.

20/1 SIR BRIAN WILLIAMSON, 58. Quit as chairman of Liffe, the financial futures exchange, this year.

25/1 ROBIN COOK, 57. Former foreign secretary.

66/1 ROBIN SAUNDERS, 41. Controversial deal maker for German investment bank WestLB.