ITV firms fear law change could allow mergers: Heritage Secretary to meet television chiefs amid angry claims that independence may be undermined

MEDIUM-SIZED independent television companies are mounting a rearguard action against a proposed change in the 1990 Broadcasting Act that could allow them to be swallowed up by larger neighbours.

Tempers are rising in what Simon Forrest, group controller of corporate affairs for HTV in Cardiff, yesterday called 'one of the biggest rifts that's ever happened in ITV'.

The dispute will come to a head in a fortnight in the Whitehall office of Peter Brooke, the Secretary of State for National Heritage.

Mr Forrest is accusing some of the biggest companies of 'a campaign of disinformation'. Another executive said: 'I don't think Mr Brooke quite realises what a Tower of Babel will confront him' when he meets ITV chiefs.

The minister has called the meetings in response to complaints by some of the largest companies about the clause in the 1990 Broadcasting Act that forbids mergers between the nine largest companies. There will probably be two sessions, on 14 and 15 June, because getting all 15 chief executives together at the same time has proved tricky.

Some reports say that Mr Brooke is ready to remove the controversial clause from the Act. But a National Heritage spokesman said yesterday that he would not make up his mind until he hears the arguments.

The strongest pressure on the minister has come from two of the largest companies, Central and Carlton. They argue that the bar on companies coming together in larger and stronger groups will make them vulnerable to bids from European conglomerates when the moratorium on takeovers expires at the end of this year.

Peter Ibbotson, Carlton's director of corporate affairs, wrote this week: 'In the EC our elegant forest of bonsai broadcasters will be no match for bigger media companies.' He estimated that duplicated overheads, not connected with programming, cost the companies pounds 100m a year, which could be saved - and perhaps devoted to strengthening regional programmes - if they were allowed to form larger entities.

The chief opponents of this view are Anglia, Meridian and HTV, of which Anglia might be an especially attractive acquisition for a neighbouring company such as Central.

David McCall, Anglia's chief executive, said last week: 'If the ownership rules are changed in isolation the concept of sovereign regional companies would be greatly undermined. We could end up with just two ITV companies.'

Anglia, HTV and Meridian do not accept Mr Ibbotson's estimate of pounds 100m a year wasted on duplication. 'You could pick any figure out of a hat,' a spokesman for one of the companies said. 'Common savings don't necessarily need common ownership.' It is also argued that even merged companies would be small compared with European media empires and so would still not be takeover-proof.

In an article in the Independent in April, Clive Hollick, chairman of Meridian, suggested that the best way of thwarting European predators would be to extend the moratorium on takeovers beyond the end of this year to 1996.

This would also safeguard the small ITV companies - Border, Channel, Grampian, Ulster and Westcountry - that would otherwise lose their statutory protection.

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