LONDON — U.S. media giants will find out today whether U.K. commercial web ITV will be worth buying when Trade and Industry secretary Patricia Hewitt delivers her verdict on the proposed £4 billion ($6.4 billion) merger of its two biggest shareholders, Carlton and Granada.
It looks as if the merged entity will keep both airtime sales units, the only way that the company would be attractive to U.S. buyers.
Blighty’s advertising media buyers have been calling for the commercial web’s sales houses to be sold off, as the new ITV would control more than 50% of the TV ad market.
But the respective heads of Carlton and Granada, Michael Green and Charles Allen, appear to have persuaded the Competition Commission to accept a compromise that could see TV ad rates capped, possibly for three years. Ad rates could also be cut if ITV’s viewing share falls.
The new Communications Act opens the door for U.S. companies to acquire ITV, though U.S. media mogul Haim Saban recently said he would “not invest one dollar” if ITV was forced to spin off its sales houses. Other U.S. firms interested in the network include Viacom, Walt Disney, Time Warner and Hallmark.
But most U.S. investors remain cautious as Carlton and Granada’s share prices are high and continuing to rise as speculation mounts that the merger will go ahead. Carlton, expected to benefit most from the deal, climbed 6.2% to $282.40 while Granada rose 2.8% to $160.80.