Gamble on rival YTTV offer

Institutional investors in Yorkshire-Tyne Tees Television believe that the pounds 11.75 a share offer planned by Granada is too low, and are set to gamble that a rival bidder will enter the fray by increasing their share holdings, writes Cathy Newman.

One large institutional shareholder, which declined to be named, has told Granada and YTTV that the intended bid price failed to take into account considerations such as a likely reduction to Yorkshire's licence fee.

"If Granada attempts to get this company on the cheap, someone could see an opportunity. In our view, a fair price would be appreciably in excess of the pounds 11.75 a share agreed," the shareholder said, and hinted that it was prepared to buy more YTTV stock in the market.

While there have been rumours that rival ITV operators such as United News & Media, which has a 13 per cent stake in YTTV, are considering a bid, there was speculation that overseas companies may strike. Mercury Asset Management, a large shareholder in YTTV, is understood to be disappointed by Granada's price. Other big shareholders include Schroder Asset Management, Barclays Global Investors, LGT Investors, Royal Sun Alliance and Fidelity.