ITV network under threat: Chief executives to challenge government over ban on company takeovers

THE CHIEF executives of the 15 ITV regional companies are to meet Peter Brooke, Secretary of State for National Heritage, this afternoon to try to resolve a dispute that threatens the existence of some of the companies.

At issue is the question of whether there should be a change in the 1990 Broadcasting Act on takeover rules. Under the Act, there is a moratorium on takeovers of ITV companies until the end of this year, unless they are mutually agreed 'friendly' takeovers, such as Yorkshire TV's recent acquisition of Tyne Tees.

But from January any of the 15 companies could be exposed to takeover bids from outside concerns, including European conglomerates. The five smallest companies - Border, Channel, Westcountry, Grampian, Ulster - could also be legally taken over by each other or by any of the nine larger companies - Carlton, LWT, Central, Anglia, Scottish, Granada, Yorkshire/Tyne Tees, Meridian and HTV.

As the Act stands, there will still be a ban on any of the 'big nine' companies taking over each other. Executives of the largest companies, notably Carlton and Central, will try to persuade Mr Brooke that this is an anomaly because it allows them to be absorbed into European concerns, but bans 'commercially-sensible' mergers that would reduce ITV's overheads. While accepting that there will have to be a rule forbidding a single grouping from controlling too much revenue in ITV, the bigger companies want the ban on takeovers within the 'big nine' lifted at the same time as the moratorium ends.

Carlton Television argues that mergers between the bigger companies could result in up to pounds 100m savings within the ITV network. Peter Ibbotson, the company's director of corporate affairs, points to the pounds 3m Carlton and LWT have saved by running a joint news operation. Sources at both Carlton and Central are confident that Mr Brooke is willing to lift the ban which is alarming Anglia, Meridian and HTV, three other members of the 'big nine', who will urge the minister not to change the Act.

'This is about Carlton and Central wanting to rule the world, to be the big players and to take out the little companies,' Simon Forest, controller of corporate affairs at HTV, said.

The smaller companies argue that the larger companies would not be able to serve the country with the regional specialism that the smaller ones do at present. David McCall, Anglia's chief executive, said the Act was framed to protect the regional nature of ITV and its regionalism is one of the network's great strengths. 'Saving pounds 100m would have to mean a metropolitan-based ITV which could not have that regional commitment.'

Instead, he and other companies want the moratorium on all takeovers extended by at least two years so that the future funding of the BBC, a key factor in the economic prospects of ITV, is clear.