EC looks into Carlton/Thomson ad link-up

LONDON - ITV company Carlton Communications has outlined a joint venture cinema advertising company with Thomson Multimedia to the European Commission, which is looking for third-party comments on the deal.

The planned company, to be called Technicolor Cinema Advertising, would be an intermediary between advertising agencies and cinemas, the Commission said.

The Commission is seeking comments from third parties that would be affected by the deal. Third parties have 10 days in which to file comments during a simplified examination under the EU's merger rules, which is scheduled to run until July 26.

Meanwhile, Carlton has seen £192m wiped off the value of the sale of its Technicolor video-processing unit to Thomson.

Since Carlton accepted 15.5m Thomson shares as part of the sale of the business, Thomson's shares have fallen 33% as the euro has weakened against the pound.

Carlton's share price fell 3.25p this morning to 309.75p on the news of the deficit.

Carlton is holding its Thomson Multimedia stake in the form of redeemable bonds. The broadcaster must hold on to them until early 2002, however, and cannot sell them until March.

Analysts believe this could pose a significant overhang in the market, which would depress the price even further.