Granada launches division to consolidate ITV interests

Granada, the media and leisure giant, yesterday announced the launch of Granada Media Group, a new subsidiary to hold the company's extensive media assets.

The revamped operating structure is aimed at consolidating Granada's ITV licences, its pay-TV investments and its 11 per cent stake in BSkyB.

As revealed in the Independent last week, Duncan Lewis, formerly the chief executive of Mercury, the telecoms competitor to BT, will be GMG's new chief executive. He will oversee the expansion of Granada's media interests on the Continent, in Asia and the US.

Charles Allen, Granada's chief executive, said the announcement did not mark a first step in splitting the company's operations in two. He added that he would continue to spend about 40 per cent of his time overseeing the TV business, despite his involvement in the time-consuming integration of Forte, the hotels and restaurants group, which Granda bought earlier this year following a bitter two-month battle.

Steven Morrison, managing director of Granada's ITV licence holder, London Weekend Television, is to be chief operating officer of the new media division.

Mr Lewis's experience managing in a regulated environment - telecoms - was considered a particular asset, Mr Allen said. The former Mercury chief was also tapped for his knowledge of advanced telecommunications markets, which are rapidly converging with those of television and broadcasting. Mr Allen said yesterday the new team would "oversee an aggressive strategy aimed at extending Granada's broadcasting interests".

Granada also owns 36 per cent of Independent Television News, the news provider for ITV, as well as a stake in GMTV, the morning commercial ITV service.

Underlying his personal involvement, Mr Allen will today meet executives of BSkyB, the satellite broadcaster, to seek wider distribution of Granada's eight new pay-TV services, grouped under Granada Sky Broadcasting, a joint venture with BSkyB.

The new services, which include a channel dedicated to repeats of Granada programming such as Coronation Street, are currently planned for transmission on the 1-D transponder of the Astra satellite, which only reaches an estimated 30 per cent of potential viewers in the UK.

Mr Allen is believed to be intent on widening the potential audience for the services, which will be the first pay-TV channels launched by an ITV company.

Separately, Granada will next week formally open negotiations on the sale of Welcome Break motorway services areas, and has identified at least three buyers for the chain. Welcome Break, which Granada inherited following its purchase of Forte, the hotels and restaurants group, earlier this year, have to be sold for competition reasons.

Whitbread, the food and drink company, is among the likely bidders.

Granada also plans to begin detailed negotiations on the sale of at least pounds 1.5bn worth of hotel assets, including the Meridien chain, and will soon post sales memoranda to about eight "pre-qualifying" bidders.