Germans poised after digital debacle

HAVING extricated themselves from the disastrous ITV Digital venture, Granada and Carlton are under pressure to sort out their own future - before someone else does it for them.

Speculation that the companies are poised to resurrect merger talks is premature, though Granada chairman Charles Allen appears keen. Securing a deal before ownership laws are relaxed next year needs a lot of goodwill from the Government, which has evaporated after the ITVD debacle.

Looking more possible is the prospect of a foreign predator swooping on either Granada or Carlton, ahead of legislation that would enable one company to own the whole of ITV.

Some investors - weary about the slump in share prices and critical of the duo's handling of the crisis - may be relieved to sell out. Mindful of this, the companies are boasting of their plans to kick-start ITV revenues and boost viewers.

Germany's Bertelsmann, which controls Channel 5 through RTL, has made no secret of its desire to be a major player in British television. It has already held talks with Carlton chairman Sir Michael Green, who could be wooed with a chairman's role at RTL.

ITV Digital had been seen as a 'poison-pill', but this obstacle has now been removed. 'Bertelsmann needs to increase investment in Channel 5 if it wants to grow audience share - yet there is no evidence of it doing so,' said Nick Bertolotti at JP Morgan. 'Maybe it is keeping options open in case of a deal with Granada or Carlton.'

Granada has also been linked with a possible bid for newspaper group Trinity Mirror. The fate of ITVD should become clearer today. Administrator Deloitte & Touche spent last night trying to flush out possible bidders.