GRANADA COULD try to renegotiate the terms of its planned merger with Carlton if, as expected, regulators insist that the combined companies divest their sales operations.
Analysts and industry sources said that, without the sales houses, the terms of the ITV merger agreed last year would favour Carlton.
Granada has a much bigger production business than Carlton, which it will put into the enlarged group. Production activities would form a larger part of the combined company, which would hold most of the ITV licences, if the competition authorities insist that the sales houses are separated and turned into independent businesses. Speaking at the annual Edinburgh Television Festival over the weekend, Anthony Fry, managing director of the media group at Credit Suisse First Boston, said: "If the sales houses go, you could argue that the terms of the merger change, because of the strength of the Granada production business," Mr Fry said.
Carlton, led by chairman Michael Green, is likely to fiercely resist any attempt by Granada to rework the terms of the merger, which gives Carlton 32 per cent of the combined group. A merged Carlton and Granada would have over 50 per cent of the …