New Carlton chief Murphy hints at Granada partnership over ITV

Gerry Murphy, the newly appointed chief executive of Carlton Communications, moved yesterday to quell antagonism about the carve-up of ITV and even mooted the idea that his company could reach an amicable partnership with its rival Granada Media.

Gerry Murphy, the newly appointed chief executive of Carlton Communications, moved yesterday to quell antagonism about the carve-up of ITV and even mooted the idea that his company could reach an amicable partnership with its rival Granada Media.

Carlton yesterday confirmed the appointment of Mr Murphy, 44, who joins from the freight distribution group Exel, ahead of what will be a fraught week of negotiations as Carlton battles for a bigger share of the UK's most popular TV channel.

Mr Murphy dismissed talk of war and said: "What's going on looks to me like civilisation. I expect that for the next few years ITV will be run as a partnership between Granada and Carlton. I think that should be fine. There is plenty of history of them working together." He said he had plans to "sort a few things out" at Exel before taking up his new role, despite Carlton's claim that he would join immediately. He added: "Frankly, Carlton doesn't want me to sort out this current round of the saga. Michael Green and his team are well able to deal with that."

Other contenders to buy slices of ITV may be less than pleased with this snug arrangement, which hinges on the sale of United News & Media's television assets. Last Friday Carlton's chairman Michael Green announced he was pulling out of a planned merger with Lord Hollick's United group after Stephen Byers, Secretary of state for trade and industry, ruled that the merged group must sell off United's south coast franchise, Meridian. At the same time, Mr Byers gave Granada free rein to bid for either Carlton or United.

Lord Hollick, who backed the Carlton merger and was to have been the new group's chief executive, then moved to auction United's television interests. These include a 35 per cent stake in Channel 5 as well as two further franchises, HTV and Anglia.

Industry sources say Charles Allen, chairman of Granada, is preparing a bid for Meridian, and failing that, will make a hostile bid for United, which under Takeover Panel rules must be filed by August 4.

Carlton, which already has Central and Carlton TV, is looking at HTV and could move to pick up United's other television assets under legislation which would limit Granada from owning all of United's regional TV franchises. Another option would be for Granada to bid for Carlton, seen as less likely. The three companies are reportedly in talks, rather than negotiations. United is valued at £4.8bn but a bidder may have to offer up to £6bn to take control of the group, whose assets include exhibitions, magazines and Express Newspapers.

Analysts believe United would look for £2.2bn for its television assets and, while Granada and Carlton are the best-placed buyers, potential foreign players have been mooted.

The German media company Bertelsmann was reported to be interested in United's online division Xilerate, while the European giant RTL, which is United's Channel 5 partner and this week goes public with a £14bn float, has frankly admitted its desire to buy out United's Channel 5 stake.

In a memo to United staff last week, Lord Hollick said he would not let Granada dictate the terms of a takeover. "It is possible that Granada Media will choose to bid for United on the cheap," he wrote. "We will vigorously defend ourselves against any such attack."