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Granada plans big deal
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November 24, 1999: 6:02 a.m. ET
Media and hospitality firm to split itself in two after purchase; earnings rise 14%
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LONDON (CNNfn) - Granada posted a 14 percent jump in underlying first-half earnings Wednesday, and Britain's media and leisure giant indicated it plans to break itself in two once it has pulled off another big acquisition.
Chairman Gerry Robinson said, "We are now managerially ready for a new acquisition. We will be ready to look over the next year or so."
A deal could come either on the media or the leisure side. Granada owns one third of Britain's Independent Television Network, and has a string of leisure activities, including 400 hotels in its Forte division, Britain's largest network of motorway service stations and a chain of health clubs.
Robinson gave no clue as to what he was looking to buy, other than to indicate a deal would most likely be in Europe or the United States. Granada has been quiet on the acquisition front since it paid 3.9 billion pounds ($6.3 billion) to win a bitterly contested fight for control of Forte Hotels in 1996.
Analysts told CNNfn.com that Robinson covets media rival United News & Media (UNWS), valued at 3.1 billion pounds, but the U.K.'s current regulatory regime precludes a deal for the moment.
Once a deal is done, Granada says it will split in two, dividing the business into a media unit and a hospitality company.
For the six months ended in March 1999, Granada generated revenue of 1.98 billion pounds, a rise of 2.5 percent. The company's operating profit grew a similar amount to 404 million pounds, after stripping out the cost of its investment in new digital-TV businesses.
The bottom line was flattered by a 347 million pound gain from the sale of its holding in pay-TV operator BSkyB (BSY). Stripping out one-time items, diluted earnings per share for the period rose 14 percent to 23.8 pence.
Granada stock gave up its early gains to trade 1.4 percent lower Wednesday at 553 pence as investors grew nervous about the acquisition plans.
-- from staff and wire reports
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Granada
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