TWW worst hit as £11.3m is wiped off television shares

By RICHARD WAGNER and JOHN CARRINGTON

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 programme contracting.

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 cent.

Negotiations have 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.

David Montagu, 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.

The Telefusion 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 Hull’s Northern Dairies; Bradford’s Fattorini stores; Bradford’s 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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And 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.

As 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 WWN).

They 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.

In 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.

ATV 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.

The 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 all?