Carlton & Granada merger talks reach an 'advanced stage'

The Boards of Carlton and Granada have announced that merger talks between the two ITV companies have reached an advanced stage.
Discussions at Carlton and Granada have been ongoing for some time with a view to agreeing terms for a possible merger of the two companies, in effect laying the foundation for a consolidation of ITV.
In a joint statement released on Friday, the two companies proposed that Carlton Chairman Michael Green (above right) would become Chairman of the merged group with Granada Chairman Charles Allen (above left) as its Chief Executive. Three non-executive directors from each company, who have yet to be named, would join the board of the merged group.
The talks have agreed in principle that, on completion of a merger, Granada shareholders would receive 68% of the equity and £200 million of cash, while Carlton shareholders would receive 32% of the equity. This potentially increases to 34% in 2006 dependent on the achievement of a share price of the merged group equivalent to 140 pence per Granada share and on achievement of an agreed earnings target. Carlton intends to pay an unchanged final dividend for the year ended 30 September 2002 of 5 pence per share.
Commenting on Friday's announcement, Michael Green, Chairman of Carlton, said: "A single ITV is within sight. In a rapidly changing broadcast industry we need to combine to compete effectively. Delay is not in the interest of viewers, advertisers, stakeholders or the future of British broadcasting."
Chairman of Granada, Charles Allen, said: "The proposed merger provides a clear route to a consolidated ITV. It would make ITV more competitive now, in an increasingly competitive market."
Carlton and Granada said that they believed the proposed structure of the merger took into account the current regulatory framework, but that they expected to undertake "extensive consultation" with the regulatory bodies. The merger would be conditional on regulatory approval.
In the statement the companies said a consolidated ITV would ensure "viewers and advertisers continue to benefit from choice, diversity and value in an ever more competitive broadcasting market and ensure that ITV retains its position at the heart of public service broadcasting.
"For viewers, it means we can continue to put our money into programmes, on-screen. For advertisers, it ensures that ITV will go on attracting the mass audiences they want."
Although no final agreement has yet been reached, a further announcement is expected shortly.
(SP)