Green discarded in quickie divorce

MARRIAGES of convenience rarely work. The unlikely union of Granada chairman Charles Allen and his Carlton opposite number Michael Green did not even survive the honeymoon.

Only a fortnight ago, the duo were quaffing champagne to celebrate their merger. Allen on Tuesday demonstrated his disdain for Green by throwing him out into the wilderness without so much as a sympathetic word.

After 'careful consideration', Granada has decided to side with rebel shareholders who called for Green to be ousted. The TV group has told lead dissident Fidelity that it will back its choice of John Nelson, a former investment banker, to be chairman when the two ITV broadcasters merge.

This is a slap in the face for Green who had been named as chairman of the enlarged group. Granada opted for a U-turn when it became clear that more than 40% of their shareholders did not want Green to stay. Allen telephoned Green to break the bad news at 6.30am on Tuesday, before a stock exchange announcement at 7am.

Carlton had little choice but to concede defeat, since Granada is the bigger company and will hold 68% of the merged group. It said Green would step down after completion of the merger in January. Until then, he intends 'to play a full and active role'.

Granada is already working behind the scenes to try to persuade Green to go sooner. Allen is unlikely to relish the prospect of working with him, having just thrown him to the wolves. Carlton's board directors had given Green their full backing in a strongly worded statement on Sunday. They had hoped Granada would do the same.

But in its tersely-worded statement, Granada did not even thank Green for his efforts during the merger process or recommend that he stays while it is finalised.

The Carlton camp was speculating about 'a conspiracy' between Allen and the dissident shareholders. Originally, Fidelity appeared to want both Green and Allen's heads on a platter, but then decided to focus on Green.

Would-be chairman Nelson certainly knows Allen well. Nelson advised Granada during its £3.5bn hostile bid for Forte in the mid-1990s and is said to be extremely close to Allen's hero - former Granada chairman Gerry Robinson. Granada shares rose 2 1/2p to 118p while Carlton rose 7 1/4p to 221p.

Investors had always doubted that Allen and Green could work together and dubbed them 'the odd couple'.

'One of them almost certainly had to go,' said Vinay Bedi, head fund manager at Wise Speke. 'Given Allen's recent successful track record, Green was the obvious choice.'

Fidelity was rejoicing on Tuesday over its victory. It insisted that the revolt was 'always about corporate governance'.

It may be prudent to inject some caution into the shareholder celebrations. Carlton and Granada face several weeks of tough negotiations with the Office of Fair Trading to sort out the fine details of their merger.

The whole process could get sticky if Green and Allen are at loggerheads over the negotiating table. Green is said to be '100% committed' to getting the merger through. Once his work is over, he may try to extract his revenge by dragging Allen down too.

Tycoon's treasure chest

MICHAEL Green's vast wealth won't entirely salve his wounded pride over such an ignominious departure, but it should help.

He could vent his wrath by selling his 10.2m Carlton shares - netting a cool £22m - and by removing his multi-million-pound modern art collection from Carlton's Knightsbridge headquarters.

Green, who earned more than £700,000 last year, cannot demand the usual 'fat-cat' payoff because he never signed a service contract. But he is likely to walk away with £2m from long-term-share and option plans and his fellow directors will probably throw in another £1.5m for good measure.

Green, 55, is also due a £134,000-a-year pension for life. After making his first million by the age of 21, his personal wealth is now thought to top £100m.

He shrewdly cashed in 3.3m of shares for £28m at the height of the media boom in March 2000 when Carlton shares were close to their 900p peak.

Elder brother David, with whom he co-founded Carlton, may sell his £20m share stake. He is a non-executive director at the company, but has also been left out of the top line-up for the merged group.

It is a sad way for the duo to bow out. They built Carlton from a tiny TV company into a top commercial broadcaster. When it floated in 1983, Carlton was valued at just £10m and made profits of £2m. By 1991, it had grown into a £1bn empire and Michael Green's personal stake was worth £50m.

Through the 1990s, Carlton took over regional TV companies including Central Independent Television for £758m in 1993.