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Bullish Carlton admits to talks with potential US partners

Saeed Shah
Wednesday 29 May 2002 00:00 BST
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Michael Green, Carlton's chairman, has held informal conversations with potential US partners, it emerged yesterday, as the company provided evidence of a sustained recovery in advertising revenue.

Reporting a loss of £179m for the six months to 31 March, Carlton, one of the two main ITV players, revealed that May, June and July were likely to be the first positive three-month period for advertising sales since mid-2000.

Mr Green told analysts that he had been fielding calls from US executives who were trying to make sense of this month's draft Communications Bill. Unexpectedly, the provisional legislation allowed non-European companies to buy ITV for the first time.

Carlton stressed Mr Green had built up strong personal relationships with executives from the main US studios from the days when his company owned Technicolor. Insiders at Carlton said these were "informal chats, not formal talks".

"Of course there have been conversations," said one source who sought to play down their significance. "But it was about clarifying the Communications Bill for these guys, shooting the breeze."

Since the publication of the draft Bill, Carlton has distanced itself from a possible merger with Granada, the other main ITV operator, and pointed to the possibility of other deals. Carlton yesterday said the Bill "could enable new opportunities for working with non-European partners".

Gerry Murphy, Carlton's chief executive, said: "It [the Bill] has created potential options for all UK media companies that were not previously on the agenda."

Previously a combination with Granada had been presented as inevitable. The big US media groups, such as Viacom and Disney, are now seen as possible bidders for Carlton or Granada, or both companies.

Carlton's interim figures were dragged into the red by exceptional items, including a £99m charge to cover its share of the closure costs of ITV Digital and a balance sheet write-down for the defunct business.

The ITV Digital fiasco, a joint venture with Granada, has cost Carlton £600m. That is before a £178.5m lawsuit brought against Carlton and Granada by the Football League, which was owed the money by ITV Digital. The ITV companies have said the lawsuit has no basis.

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