TWW worst hit as
£11.3m is wiped off television shares
By RICHARD WAGNER and
In a frenzy of stock
market activity yesterday following the reallocation of television franchises, a
total of £11.3m. was wiped off the value of five companies with stakes in
T.W.W. registered the
biggest fall. down by 9s. 3d. to 18s.
A.B.C. Pictures dropped
4s. 6d. to 28s., and Rediffusion lost 1s 3d to 12s 1.5d. Telefusion, the
successful Yorkshire bidder, rose 4s. 6d. to close at 26s. 9d.
At the same time the
programme companies, successful and unsuccessful alike, were hastily
reconsidering their plans for the future. The biggest subject for conjecture was
whether Rediffusion Television would consent to become the junior partner in a
new joint company with A.B.C., to handle the London weekday franchise.
John Spencer Wills,
chairman of Rediffusion Television and also of Rediffusion and British Electric
Traction, the major shareholders in the television company, said last night:
"I cannot say definitely that we shall decide to go in with A.B.C."
Mr. Wills said he was
particularly worried about the extent of the company's capital commitment. An
expenditure of £600,000 has already been authorised, which would have doubled
on the renewal of a full franchise. Only last weekend it was announced that
Rediffusion had placed an order with Marconi for an advanced four-camera outside
broadcast unit, which is understood to cost around £100,000.
The breakdown of the
London Television Consortium, soon to be renamed, was announced yesterday as: -
Bowaters, 7 1/2 per cent; Imperial Tobacco pension fund, 7 1/2 per cent; G.E.C.,
7 1/2 per cent; Lombard Banking, 7 1/2 per cent; Pearl Assurance, 7 1/2 per
cent; Observer, 7 per cent; Daily Telegraph, 7 per cent; London Co-ops, 5 1/3
per cent; Samuel Montagu, 3 2/3 per cent; Collins Publishers, 1 1/2 per cent;
Spectator, 1 1/2 percent; New Statesman, 5/6 per cent; Magdalen College, 5/6
cent; University College London, 1/3 per cent; Weidenfeld publishers, 1/3 per
cent; Sir Donald Stoke, 1/3 per cent; Executives and creative talent, 31 per
reached an advanced stage with the Economist for a 3 per cent participation. The
percentages apply pro rata exactly evenly to the £15,000 voting
shares, £1,500,000 non-voting and £2m. loan stock.
financial adviser and a director of the group, does not expect the company to go
public until the loan stock and bank overdraft, already available, are
substantially reduced. This may well coincide with the time that a dividend
starts to be paid, about five years after broadcasting starts.
consortium, renamed Yorkshire Television Network yesterday at the behest of the
l.T.A., was not able to give such comprehensive details of its financial
structure. As the I.T.A. directed, an offer of 17 per cent participation has
been made to elements of the Yorkshire Post group. Talks are being held
in Leeds today.
Some details of the
network are available. Telefusion will have 18 per cent. If the Yorkshire
Post take up the 8 per cent it has been offered it will be the second
largest shareholder. Holdings of 5 per cent or above would go to the Burton
tailoring family trusts. Holdings of I per cent or above go to: Boston Deep Sea,
a subsidiary of Hullís Northern Dairies; Bradfordís Fattorini stores;
Bradfordís Parkland Manufacturing; and the Worsley family.
The consortium is
raising the total capitalisation off £4 3/4m. as £1m. unsecured 8 per cent
loan stock and the rest in 5s. shares.
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so to the day after. The news had been announced on a Sunday evening (then, as
now, the Stock Exchange disliked surprises, so all announcements of this sort
came before the market opened; the aim being to prevent a run on the market or a
full-blown crash due to people being too quick to sell), which had caught the
Monday papers print run. Now the predictions on the City pages that Monday were
put to the test.
we have seen, the pundits were generally confident that TWW would be best off,
especially considering that it had suffered the worst. All were likely to
suffer, said the columnists, as the system was no longer as secure-seeming as it
once had been (indeed, each company was thought of as a mini-BBC, there forever,
unless it foundered financially, which only happened once, in 1964, to tiny
were wrong. TWW took a hammering, its diversifications now seeming to be a
number of disparate companies bound together for no reason, without an ITV cash
cow to milk. The public ranting by TWW against the unfairness of it all could
not have helped either.
the aftermath of the unusual idea of forcing two companies to merge, ABPC,
parent company of ABC, lost ground, as did the parent companies of Rediffusion
London, the aptly-named Rediffusion and the conglomerate BET. This may have been
on the grounds of fear of the unknown, but also might have reflected other
possibilities: the fear that ABPC could lose 49% of the profits of The Avengers
and other big international sellers from ABC; or the fear that Rediffusion might
quit and leave ABC to run the franchise itself. In the end, these fears balanced
each other out, and the share prices of the two companies held firm.
found itself in the strange position of the changes having no effect - a case of
six of one, half a dozen of the other - although the annual report in 1969
barely conceals the annoyance of the board at the loss of London.
winners in this were Tyne Tees (unaffected and fairly affluent) and, more
surprisingly, Granada. The City pages the day before had been sure that the loss
of half the region was to be equated with the loss of half the income. With more
time to reflect, perhaps, the brokers decided that concentrating the company in
one area would reduce expenses, while a share of the highly lucrative weekend
television market could only be a positive. Perhaps this wasn't so bad after