Granada confirms interest in 90% share of TV3

Granada has confirmed it is interested in doubling its stake in TV3 to 90 per cent. But CanWest Global Communications, the Canadian company whose stake in TV3 Granada wishes to buy, claims it has no immediate plans to sell.

In a presentation to investors last month, CanWest listed a number of non-core assets that it is looking to divest in order to reduce its debt.

That list included its community newspapers in Canada and its TV and radio portfolio in New Zealand.

However, its 45 per cent stake in TV3 was not on the list.

Mr Geoffrey Elliot, CanWest's vice-president of communications said his company was "delighted" with the performance of TV3, adding the stake was not currently up for sale.

"At the moment we have made known a number of assets that we are looking to sell," he said.

"Any speculation in the media or among analysts that we are about to sell TV3 is just that, speculation."

He added, however, that while the future of its holding in TV3 had "not been considered one way or the other", the status of all of its assets was "constantly under review".

CanWest's total debt stands at 3.5 billion Canadian dollars (€2.25 billion) and it faces debt repayments of Can$127 million in 2003 and 2004.

The group's accounts show earnings before interest and tax from its stake in TV3 were Can$2 million in the third quarter of the current year compared with C$1 million 12 months earlier.

Revenues from TV3 increased from Can$6 million to Can$7 million. Under a deal struck in 2000, Granada has first option to buy CanWest's stake. Granada chairman Mr Charles Allen said last week that his company would like to own the rest of TV3.

A spokesman for Granada said the company's focus now lay with its proposed merger with Carlton, details of which were unveiled yesterday, but an increase of its stake in TV3 would be considered at a later stage.

The deal proposed by Granada and Carlton involves Granada paying £1 billion (€1.58 billion) for Carlton.

Current Granada shareholders will own 68 per cent of the merged group and receive £200 million in cash.

Carlton's shareholders will take a 32 per cent stake in the merged entity.

The merger should generate around £35 million of cost savings per annum by the end of the first year, Granada said yesterday.

CanWest bought its 45 per cent stake in TV3 in 1997, one year before the independent station went on air.

Granada acquired 45 per cent in the group in 2000. Both stakes are worth an estimated €50 million.