ITV edges closer to a consolidation as United secures HTV

ITV’s consolidation into three power bases neared completion last week when United News and Media completed its acquisition of the Wales and West of England broadcaster, HTV.

ITV’s consolidation into three power bases neared completion last

week when United News and Media completed its acquisition of the Wales

and West of England broadcaster, HTV.



Lord Hollick, the chief executive of United, has reached an agreed

pounds 372 million bid for the broadcaster in a deal that values HTV at

40 times its 1996 earnings, way above the 30-times earnings more usual

in the broadcast arena.



United already owned almost 30 per cent of HTV after making an initial

assault at the end of last year, when it snapped up a 20 per cent stake

from the Scottish broadcaster, STV.



United’s swoop comes a week after Granada launched its bid for Yorkshire

Tyne-Tees, in which United has a 15 per cent stake. The price paid by

United for HTV is said to have put further pressure on Granada to up its

offer for YTT from pounds 711 million - 32 times earnings.



The offer met with instant disapproval from large investment groups.



According to Bill Barker, the broadcast director of J. Walter Thompson,

the multiple HTV is paying ’means the company will have to radically

reduce costs and that suggests that there’s not much to be gained by the

viewer from this. The only way ITV can contain its revenue erosion is to

contain its audience erosion and strong regional stations will be

crucial.’



The recent ownership changes are, however, unlikely to affect airtime

sales. YTT is already sold by Granada’s sales house, Laser Sales, while

HTV is sold by United’s sales operation, TSMS.



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