Media shares were sent into a spin today following the announcement from Carlton Communications and United News & Media that their merger was off.
The pair had received a blessing for the tie-up from Secretary of State for Trade & Industry Stephen Byers last Friday, but on condition that United’s Meridian ITV franchise would have to be sold. This undermined the rationale behind the deal, the pair said.
The news sent shares in the two in opposite directions, with Carlton off 5p to 815p and United up 16p to 960p. Granada Media, which has been given the green light to bid for either of the two, lost 30p to 576p.
The announcement came in a lacklustre day on the market, which saw the FTSE-100 Index open lower – pulled down by losses in telecoms and pharmaceutical stocks. Strong closes overnight on the US markets also failed to inspire the FTSE.
US shares had been buoyed by Federal Reserve chairman Alan Greenspan’s speech yesterday, which gave traders little cause to worry over interest rate hikes.
On this side of the Atlantic, heavyweight telecoms company Vodafone AirTouch provided a drag on the market, losing 7p to 300p, while Telewest Communications fell 10p to 248p.
Merging drug giants SmithKline Beecham and Glaxo Wellcome also pulled the FTSE-100 lower, off 25p at £17.95 and 8.5p at 812.5p respectively.
But guns-to-buns group Tomkins jumped 3p to 215p after clinching a £1.1bn deal to sell its Ranks Hovis McDougall food manufacturing business to private equity firm Doughty Hanson.
EGi News 21/07/00
