Granada feeds war chest

Cash to finance takeover bid

LONDON — Granada Group plans to raise £1.5 billion ($2.25 billion) for its takeover war chest by selling up to 20% of Granada Media next month.

The cash from the partial sale of Granada Media — which is being split from Granada’s main hotels and catering business — will help finance a takeover bid for either Carlton Communications or United News & Media, the other two big ITV network companies.

The stand-alone Granada Media is expected to be worth over $10 billion and will be well placed to derail the agreed merger between Carlton and United. Any combination of ITV’s “big three,” however, will require regulatory changes. The government is due to rule on Carlton/United next month.

Charles Allen, chairman of Granada Media, is embarking on a tour of Europe and the U.S. to talk to investors about the company’s plans.

Come fall, those plans could include floating ONdigital, the terrestrial pay TV platform that Granada co-owns with Carlton. ONdigital, believed to have more than 750,000 subscribers, could be worth as much as $3 billion.

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