Granada confirms interest in 90% share of TV3

[Guest]

By Conor Lally



Granada has confirmed it is interested in doubling its stake in TV3 to 90 per cent. But CanWest Global Communications, the Canadian company whose stake in TV3 Granada wishes to buy, claims it has no immediate plans to sell.

In a presentation to investors last month, CanWest listed a number of non-core assets that it is looking to divest in order to reduce its debt.

That list included its community newspapers in Canada and its TV and radio portfolio in New Zealand.

However, its 45 per cent stake in TV3 was not on the list.

Mr Geoffrey Elliot, CanWest's vice-president of communications said his company was "delighted" with the performance of TV3, adding the stake was not currently up for sale.

"At the moment we have made known a number of assets that we are looking to sell," he said.

"Any speculation in the media or among analysts that we are about to sell TV3 is just that, speculation."

He added, however, that while the future of its holding in TV3 had "not been considered one way or the other", the status of all of its assets was "constantly under review".

CanWest's total debt stands at 3.5 billion Canadian dollars (€2.25 billion) and it faces debt repayments of Can$127 million in 2003 and 2004.

The group's accounts show earnings before interest and tax from its stake in TV3 were Can$2 million in the third quarter of the current year compared with C$1 million 12 months earlier.

Revenues from TV3 increased from Can$6 million to Can$7 million. Under a deal struck in 2000, Granada has first option to buy CanWest's stake. Granada chairman Mr Charles Allen said last week that his company would like to own the rest of TV3.

A spokesman for Granada said the company's focus now lay with its proposed merger with Carlton, details of which were unveiled yesterday, but an increase of its stake in TV3 would be considered at a later stage.

The deal proposed by Granada and Carlton involves Granada paying £1 billion (€1.58 billion) for Carlton.

Current Granada shareholders will own 68 per cent of the merged group and receive £200 million in cash.

Carlton's shareholders will take a 32 per cent stake in the merged entity.

The merger should generate around £35 million of cost savings per annum by the end of the first year, Granada said yesterday.

CanWest bought its 45 per cent stake in TV3 in 1997, one year before the independent station went on air.

Granada acquired 45 per cent in the group in 2000. Both stakes are worth an estimated €50 million.




© The Irish Times

[Radio Mad]

It’s going to be very interesting to see how things pan out for UTV and TV3 with regard to Granada and Carton’s proposed merger within ITV. If what seems like the inevitable happening, the one company – to be named ITV Plc, will own all the ITV companies in England, Wales and eventually Scotland. The separate and distinctive regional identities, such as Tyne Tees, Yorkshire, HTV etc., will disappear to be replaced by station names on the same lines as those of the BBC – as in ITV Wales, ITV London etc.

UTV, the extremely successful ITV franchisee in Northern Ireland, don’t appear too willing to sell out just yet, nor will they be prepared to relinquish their branding to that of ITV. After all, they have built their thriving Internet and ever growing radio station businesses on the back of their brand name. Moreover, there is no love lost between them and Carlton/Granada. Last year UTV teamed up with a consortium headed by Sky in an unsuccessful attempt to wrestle the ITV news contract away from ITN who are half owned by Carlton and Granada. This didn’t go down well at the time.

With this in mind, I feel Granada, who will be the majority shareholder in the newly envisaged single ITV, will seek to take total control of TV3 – it already owns just short of half of the station - making it an integral part of the ITV network. While ITV would still be duty bound to supply UTV with programming under the existing ITV charter, TV3 (possibly renamed ITV3 for the purpose) would effectively become ITV’s regional station in Ireland.

Of course, the above scenario could only come into play at this time with the express approval of the Irish and British Governments. However, as we all know broadcasting is an ever-changing industry, and who knows, with us all getting ever closer to becoming full Europeans the barriers or obstacles currently in place might cease to be in a couple of years time.

Interesting times ahead.