SMG prepares for potential GMTV bidding war with Walt Disney

Published on 11/10/2003 01:00

SMG was yesterday stocking its arsenal ahead of a head-to-head battle with Walt Disney over control of breakfast TV broadcaster GMTV.

The Glasgow-based media giant, which operates the STV and Grampian TV franchises, has called on Carlton and Granada to offload their holdings in GMTV as a condition of their 4 billion merger - which was given the green light this week.

SMG and Disney both own 25 per cent holdings in GMTV, and have exclusive rights to bid for the half owned by Carlton and Granada should the Office of Fair Trading force the group to give up its stake.

The newly-merged ITV owns 50 per cent of GMTV, a majority stake which the Glasgow group argues is a position of unfair market dominance.

A source close to SMG yesterday confirmed that it would be interested in buying GMTV if the remaining 50 per cent is made available, but only "at the right price".

US giant Disney earlier signalled that it has the same intentions for the breakfast TV franchise, setting up a potential bidding war between the two rivals pending an OFT decision.

As part of the terms of Carlton’s merger with Granada, the potential bidders would not have to fear the possibility of a third party moving for GMTV, which accounts for 2 per cent of total TV advertising revenue.

Both companies retain the option to up their stakes to an even 50 per cent, but it is understood that both groups are determined to gun for full control.

SMG’s calls for the merged ITV to offload its stock were made to the Department of Trade and Industry head Patricia Hewitt when the deal was first mooted a year ago.

The Secretary of State asked all concerned parties to submit concerns over advertising, programme commission and network dominance should the deal go ahead.

It is now down to the OFT to decide whether the sell-off is necessary, although the watchdog has yet to set a deadline on its deliberations.

Neither Granada nor Carlton were willing to comment on the situation last night.

Shares in SMG closed down 1 per cent or 1p at 108p.