Hollick secures a stake in HTV as fight for franchises hots up

United News and Media, Labour peer Lord Hollick's conglomerate, will today announce that it is buying a 20 per cent stake in HTV, the ITV licence holder for Wales and the West, launching the long-awaited consolidation of Britain's commercial television sector.

The purchase of the stake, from Scottish Television., will be seen in the City as proof that Lord Hollick intends to mount a full bid for HTV, one of the leading takeover candidates among the ITV companies.

United already controls the Meridian and Anglia TV franchises. United News and Media may also be planning to sell its 14 per cent stake in Yorkshire- Tyne Tees, the northern-based ITV company, to Granada, which already controls 27 per cent of YTT. The corporate moves are expected to lead to a full take-over by Granada of YTT and by United of HTV.

The ITV sector has been poised for takeover action ever since the Government passed the Broadcasting Bill, which for the first time allows companies to control more than two ITV licences. Provided a single company does not control 15 per cent of the total television audience in the United Kingdom, it will be free from November 1 to own as many franchises as it wishes. United's move on HTV is likely to attract the interest of Carlton Communications, Michael Green's media company, which owns the London weekday and Central ITV franchises. Mr Green has long coveted HTV and is unlikely to watch his rival snap it up.

Full bids for YTT and HTV by their respective suitors will probably await a softening of the share prices of both target companies. Both have seen their shares rise sharply in anticipation of bid activity. HTV is worth well in excess of pounds 320m, while YTT could fetch as much as pounds 800m. Smaller ITV companies are also expected to be sold, as the consolidation takes grip. Ulster TV, Border Television, and even Westcountry, the ITV franchise holder in Devon and Cornwall, are all vulnerable. Indeed, Westcountry has itself solicited bids from potential buyers, of which Carlton is thought the most likely. United's pre-emptive move on HTV is thought to be linked to its concerns about its share of the ITV advertising market. Its sales house, TSMS, sells air time for HTV and Westcountry, and it is keen to ensure rivals do not steal market share.

The purchase of the HTV stake by United marks Lord Hollick's second big buy in the space of two weeks. Last week, his company offered nearly pounds 600m for Blenheim, the exhibitions company. Scottish Television is thought to be looking to reduce its debt by selling the HTV stake.