Shareholders seek change at Carlton and Granada

Large shareholders in Carlton Communications and Granada have made approaches to secure new management for the combined TV group, if its planned merger goes ahead.

Roger Parry, chairman of the UK arm of US group ClearChannel, Michael Jackson, the former boss of Channel 4 who now works in the US, and Michael Grade, another former boss of Channel 4, are the favourites.

The £2bn deal, that would create one company controlling almost all of ITV, has been referred to the Competition Commission but is expected to be approved in the summer.

However, unrest about the management and pay policies of the two companies have led leading shareholders to try to engineer a "regime change" at the merged ITV giant. The original plan envisaged Michael Green, Carlton's chairman, being chairman of the merged group with his counterpart at Granada, Charles Allen, as chief executive.

Last week, unhappiness with the way Granada has been performing and the high level of pay and bonus for Mr Allen, led a quarter of shareholders to refuse to back a motion to re-elect him as a director at Granada's AGM.

Carlton is trying to head off a similar revolt at its AGM this week, making concessions about Mr Green's contract.

"Allen is holed below the water line and Green is listing badly," said one leading fund manager. "The only chance is to bring in fresh blood."

The plan is for one of the two TV bosses, most likely Mr Allen, to stand down in favour of a new senior executive when the merger is announced. The other chief will announce that he is staying on to bed-in the merger and will resign when a replacement is appointed.

Both Carlton and Granada have lost their chief executives in the last year. Carlton's Gerry Murphy left to head up Kingfisher while Granada's Steve Morrison carried the can for the group's disastrous investment in ITV Digital.