Clash over toppers spurs U.S. takeover talk
LONDON — The prospects of a U.S. media combine swooping in on ITV, the struggling U.K. commercial web in the throes of a $6.5 billion merger, have improved, with investors braced to eject the new combo’s chairman-elect, Michael Green.
Green, chairman of Carlton, which two weeks ago was given the greenlight to merge with Granada by British regulators, is expected to be forced to step down by rebel City financiers. They hold him personally responsible for the $1.7 billion failure of ITV Digital, Carlton and Granada’s terrestrial pay TV venture.
A board meeting by Carlton stockholders today is likely to seal Green’s fate and block his ambition to run a new-look ITV alongside Granada topper Charles Allen, the would-be CEO of ITV.
“Green’s dead in the water,” said a senior British TV exec, “and the betting is that Allen will be gone, too, within six months at the latest.”
Investors have never forgiven Carlton and Granada for the ITV Digital fiasco and what they saw as inept handling of ITV during the recent ad recession, when plunging revenues and ratings caused stock values to plummet.
Stockholders say if ITV is to re-emerge as a strong competitor against pubcaster the BBC and Rupert Murdoch-backed satcaster BSkyB, a fresh pair of eyes is needed.
David Cumming, head of U.K. equities at Standard Life, one of the Carlton stockholders demanding Green’s head, said the exec is doomed.
“Given that 35% of shareholders already favor this course of action — and I believe it is over 50% on an unofficial basis — Michael Green is going to have to stand down at some stage.
“If they do resist, then it’s simply a question of requisitioning an emergency general meeting to force the proposal through.”
Standard Life is one of eight shareholders that want Green ousted before the merger is completed in 2004.
Over the weekend, it emerged that disenchanted investors, led by U.S. institutional investor Fidelity, sent Green a resign-or-else letter Friday.
“We are unhappy with the merger being consummated by people entirely associated with the past when that past hasn’t been particularly successful,” Cumming added.
Stockholders also are worried that Green and Allen, two very different personalities, will not work effectively together in a merged ITV.
But the execs’ supporters insist that if the merger is to work, management continuity is essential. They point to ITV’s recently improved performance and the highly advantageous terms of the merger, which should give the web a big competitive advantage against rivals in the airtime sales market.
Green’s backers also fear that another chair could leave ITV vulnerable to takeover by a U.S. group, allowed for the first time under new media ownership rules.