Merger of Granada and Carlton

Wed 18 Jun 2008

Sector

PLC

MERGER DOCUMENTS POSTED / CARLTON PREFERENCE SHARE OFFER

The Boards of Granada and Carlton announce that the pre-conditions to the Merger of Granada and Carlton have now been satisfied or waived and accordingly the formal documents relating to the Merger are being posted to shareholders today. The Merger is being effected by the acquisition of Carlton and Granada by a new holding company, ITV plc, through inter-conditional schemes of arrangement.

Terms of the Merger

Under the terms of the Merger, Granada Shareholders will receive:

  • for each Granada Share 1 ITV Ordinary Share; and

Carlton Ordinary Shareholders will receive:

  • for each Carlton Ordinary Share 1.9386 ITV Ordinary Shares and 0.1835 ITV Convertible Shares

On completion of the Merger, Carlton Ordinary Shareholders will receive approximately 32 per cent. of the issued ordinary share capital of ITV plc. This will potentially increase to approximately 34 per cent. in 2006 conditional on the achievement of a share price for the ITV Ordinary Shares of 140 pence and on achievement of an earnings target for the ITV Ordinary Shares for the year ending September 2005 equal to or greater than 6.26 pence. This will be effected through the issue of ITV Convertible Shares to Carlton Ordinary Shareholders on completion of the Merger.

On completion of the Merger, Granada Shareholders will receive approximately 68 per cent. of the ITV Ordinary Shares, potentially reducing to approximately 66 per cent. in 2006 if the ITV Convertible Shares convert. It is also intended that Granada Shareholders on the register of members of Granada on 28 January 2004 will receive a total of approximately £200 million in cash following completion of the Merger which is equivalent to approximately 7.225p per Granada share. The ex-date for the issue of Granada Redeemable Shares is 26 January 2004.

The Merger is subject to the conditions set out in Part Three of the joint scheme document being posted today, including, amongst other things, the approval of the Merger by shareholders of both Granada and Carlton and the approval of schemes of arrangement of Granada and Carlton by the Court which is expected on 30 January 2004 at which time Michael Green and Paul Murray will resign as directors of Carlton.

Carlton Preference Share Offer

In the original announcement of the Merger in October 2002, Carlton and Granada stated that appropriate proposals would be made to Carlton Preference Shareholders upon posting of the Merger documentation. Accordingly, an offer is being made by ITV plc to Carlton Preference Shareholders of 102 pence in cash per Carlton Preference Share (plus an amount equal to any accrued but unpaid dividend in respect of each Carlton Preference Share up to but excluding the date of acquisition) in consideration for the cancellation of those shares. This proposal is to be implemented by means of a scheme of arrangement of the Carlton Preference Shareholders, which is conditional (amongst other things) on the Merger becoming effective. The Merger is not conditional on the Carlton Preference Share Offer becoming effective.

Timetable of Key Events

The timetable of key events is expected to be as follows:

  • 13 January 2004 - Shareholder meetings
  • 30 January 2004 - Court hearings; last day of dealings in Carlton Shares, Granada Shares and Carlton ADSs
  • 2 February 2004 - Effective date of the Merger and commencement of dealings in ITV plc shares

Press Enquiries

Granada Tel: 020 7737 8719 Susan Donovan

Carlton Tel: 020 7347 3626 Peter Rushton

Citigate Dewe Rogerson Tel: 020 7638 9571 Jonathan Clare Simon Rigby

Brunswick Tel: 020 7404 5959 Andrew Garfield

Other

Copies of the Listing Particulars and the Scheme Document have been submitted to the UK Listing Authority and will shortly be available for inspection at the UK Listing Authority’s Document Viewing Facility which is situated at: Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS, telephone 020 7066 1000. The Document Viewing Facility is open from 9 a.m. to 5.30 p.m. on every weekday except bank holidays.

The Merger documents will also be available in the ITV Merger section on ITV’s website (www.itv.com), on Carlton’s corporate website (www.carltonplc.co.uk) and in the Investor Information section on Granada’s website (www.granadamedia.com).

In accordance with Rule 2.10 of the City Code on Takeovers and Mergers, Granada announces that it has 2,768,244,245 ordinary shares in issue of 10p each at 8 December 2003 (ISIN GB0008275660). Carlton announces that it has 671,960,088 Ordinary shares of 5p each (ISIN: GB0003419255) and 163,532,321 6.5p (net) Cumulative Convertible Redeemable Preference shares of 5p each (ISIN: GB0001765030) in issue at 8 December 2003.

FORWARD-LOOKING STATEMENTS

DISCLOSURE NOTICE: The information contained in this press release is as of 8 December 2003. Granada and Carlton assume no obligation to update any forward-looking statements contained in this press release as a result of new information for future events or developments.

In order to utilise the “Safe Harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, Granada and Carlton are providing the following cautionary statement: This document contains certain statements that are or may be forward-looking with respect to the expected timing and completion of the merger between Carlton and Granada, as well as the implementation of the integration plans for the merged group. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, statements made elsewhere in the press release, as well as material changes in tax laws and regulations and the ability of Granada and Carlton to (i) obtain shareholders’ approval or remaining regulatory clearances for the transaction and (ii) integrate the businesses of Granada and Carlton, achieve cost savings and realise other synergies in connection with the Merger, in each case without unforeseen delay. A further description of certain of these matters can be found in Item 3.B, “Key Information-Risk Factors” included in Carlton’s Annual Report on Form 20-F for the fiscal year ended 30 September 2002, filed with the United States Securities and Exchange Commission (Commission file number: 0-15252).

END