Granada shares rise as it denies ITV Digital write-off

LONDON - Granada has denied reports that it has decided to write off tens of millions of pounds over its investment in ITV Digital.

A report in yesterday's Sunday Telegraph said that Carlton Communications, Granada's partner company in ITV Digital, was planning to announce it was writing off £35.6m on its remaining investment in ITV Digital. It also said that Granada was planning a similar move.

Such a write-off would indicate that the companies are preparing to move out of digital broadcasting entirely, contrary to current plans that could see ITV Digital come out of administration as a viable operation.

Shares in both companies rose when the markets opened this morning, with Granada up 2p, or 1.5%, to 135.75p and Carlton up by 2.5p, or 0.9%, at 261p.

Deloitte & Touche is continuing its review of ITV Digital, after being appointed as administrators on March 27. It is still negotiating with the Football League to work out a new deal on TV rights and believes it has a further week before deciding whether to sell the company's assets or wind it up altogether.

Other reports emerging at the weekend suggest that the Football League is close to accepting a compromise deal.

A further indication that the ITV companies are seeking a settlement with the Football League is that Steve Morrison, the Granada chief executive, has held talks with advisers to the Football League.

According to the Financial Times, Morrison was seen meeting David Buchler, the insolvency expert who is advising the league in the director's box at Highbury on Saturday as Arsenal played Tottenham.

According to the paper, the two were seen having intense discussions, thought to have been about the dispute.

However, as Buchler is the vice-chairman of Spurs and Granada holds a minority stake in Arsenal, it could have been about the game. Arsenal won 2-1.

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