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United News opts for cash
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December 14, 2000: 11:19 a.m. ET
UK broadcaster chooses $1.25B in cash over Granada Media shares
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LONDON (CNNfn) - U.K. broadcaster United News & Media PLC demanded £1.25 billion in cash in its planned sale of TV assets Thursday, spurning an all-share option from buyer Granada Media PLC.
In July, United News agreed to sell selected geographic franchises in Britain's most popular channel, ITV, to Granada Media for a total of £1.75 billion – with the option of receiving £1.25 billion ($1.8 billion) of that in cash or new Granada Media shares. 
At the time of the deal Granada Media shares were basking in the glow from their successful initial public offering earlier in the year, and trading at 585 pence. Since then however, European investors have adopted a much more cagey approach to media shares, and Granada Media stock has fallen by a quarter to 439 pence.
United confirmed Thursday that it wanted hard cash, rather than the devalued Granada shares. United will hand back these proceeds through a share buyback program to be instigated next year.
United News & Media, after a radical reorganisation this year, also said it was cutting its investment in online businesses to £60 million in 2001 from £120 million in 2000, following in the footsteps of other U.K. media groups. The firm has shifted its focus to building a market information group.
In late London trading Thursday, shares of Granada Media (GME) dropped 6 percent to 430 pence, while United News (UNWS) fell 4 percent to 848 pence.
The firm said the change of its name to United Business Media to reflect its new focus on business-to-business activities, would become effective on Monday.
-- from staff and wire reports 
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United News & Media
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