Mersey TV and ALL3MEDIA Plot New Future

Mersey TV and ALL3MEDIA Plot New Future

LONDON, June 21/PRNewswire/ -- The Boards of Mersey TV and ALL3MEDIA are pleased to announce that they
have agreed terms for the acquisition by ALL3MEDIA of Mersey TV.

The Mersey Television Company is an established and renowned producer of
high quality television programmes. Founded by its Chairman, Phil Redmond,
based in Liverpool in the North West of England, Mersey has been run by Phil
and Alexis Redmond for the past 23 years. It produces two of the country's
most well known drama series, Hollyoaks, Channel 4's flagship drama serial
for young people and Grange Hill, the BBC's most popular Children's drama.
Mersey was equally acclaimed for its 21-year long ground-breaking soap opera,
Brookside.

As the largest independent UK producer of drama, Mersey also has a strong
track record of technical innovation. The Company has achieved "icon" status
in the North West and Mersey enjoys a deservedly high reputation as a "talent
nursery," having developed both a highly productive team in the business
today and an equally impressive alumni of writers, directors and cast who
helped to build and create the Mersey franchise over the years under the
Redmond's joint leadership.

Mersey TV's award-winning Hollyoaks franchise is recognised and renowned
for being the market leader in the highly valuable 16- to 24-year old
audience category. It accounts for 11.6% of all 16-24 year-olds viewing C4,
and is the No. 1 rated programme in this age group so far in 2005. As such,
Hollyoaks is rated as a flagship programme for Channel Four. Given the
importance of this relationship, the acquisition of Mersey represents a key
strategic move forward in the development of ALL3MEDIA.

In further recognition of the value of Hollyoaks, Channel Four has
recently commissioned a new sophisticated, 15 x 60-minute drama series, its
first new drama commission for E4 this autumn as part of their development
strategy. The new drama will be an expansion of the hit soap, aimed at the
25- to 34-year-old category, and will develop the brand even further by
featuring the stories of life beyond Hollyoaks.

In another important and separate development, the BBC has just signed a
new three-year deal with Mersey TV for Grange Hill, which represents its
strongest children's TV brand and is the most popular UK produced children's
programme on all channels amongst 13-15 year olds. Mersey is proud to
announce that Grange Hill will mark its 30th anniversary in 2007.

In 2002 the Redmonds began their succession plan by taking on an external
financial partner LDC (Lloyds Development Capital), which proved an extremely
fruitful and rewarding experience.

Looking forward to Mersey's future within the ALL3MEDIA Group, both
boards are pleased to announce that Carolyn Reynolds, previously Controller
of Drama, Granada (Manchester), and former executive producer of Coronation
Street, will become Chief Executive of Mersey TV working with its leadership
team.

Carolyn's qualification for this important and strategic role is
impeccable. Her track record with Coronation Street is held in high esteem
throughout the industry. Her many other programme successes such as the ITV
dramas Reckless and Blue Murder, as well as the award-winning At Home with
the Braithwaites, make her the preferred choice to fill this demanding role.

Sean Marley, previously Managing Director of Emap's Radio City, and
currently Mersey TV's Commercial Director, becomes the new Managing Director.
Leading members of the management team stay on.

The acquisition represents a major achievement and a substantial step
forward for ALL3MEDIA. Not only does it add Mersey's talent and franchise to
its impressive array of businesses, but also it strengthens its position in
drama to complement its leading brands in other genres and continues the
momentum of growth that has become a hallmark of ALL3MEDIA.

ALL3MEDIA has, in just a few years, built a pre-eminent market position
as Britain's leading independent production group. ALL3MEDIA is a
Bridgepoint-backed company created in 2003 through a GBP45 million management
buy-in led by Steve Morrison, Jules Burns and David Liddiment of the former
Chrysalis TV Group. ALL3MEDIA as a combined group, following the acquisition
of Mersey TV, will have a turnover in the region of GBP205 million for 2005.

ALL3MEDIA's strategy has been, and continues to be, based on driving
growth through the combination of organic development of its own talent, and
by the acquisition of leading brands which fit with ALL3MEDIA's strategy,
share its vision of the future, and see, in being part of ALL3MEDIA, the
opportunity to take their businesses to new levels of achievement.

To date, ALL3MEDIA has created and brought together a talented group of
10 leading TV production (and film) companies, and it has its own programme
and format distribution arm, ALL3MEDIA International. These companies contain
some of the industry's most talented professionals in their respective genres
working in the UK, Europe, Australasia and the US.

The Boards of Mersey and ALL3MEDIA have determined that the acquisition
consideration will not be disclosed by agreement of both parties. The Royal
Bank of Scotland Corporate Banking Media team provided debt finance for
ALL3MEDIA. Deloitte & Touche and DLA advised Mersey TV on the transaction,
and Longacre advised ALL3MEDIA. PricewaterhouseCoopers and Ernst & Young
provided financial and tax due diligence for ALL3MEDIA, and Weil, Gotshal &
Manges LLP acted as legal advisers.

Commenting, Phil Redmond, Chairman, Mersey TV said:

"It has been public knowledge for some time that Alexis and I have been
on a succession and exit route, having spent the past few years making sure
that Mersey Television was well placed to continue after our departure.

"While it is always tempting to look back on what has been achieved,
Alexis and I think it is important to look forward as we firmly believe that
the Company is now in safe hands to continue to grow and prosper. We will
still be attached to the new venture through both Grange Hill and as "the
Indie of Choice" for anything we plan to do in the future.

"Like Brookside, Hollyoaks and Grange Hill, no episode brings anything
to a close, just opens up the next possibility. This is not the end of
anything, but the beginning of a new chapter in the lives of Mersey, Alexis
and myself."

Steve Morrison, Chief Executive, ALL3MEDIA said:

"Having worked in the North West for 20 years I have always had the
greatest admiration for the way the Redmonds have built up Mersey Television
into Britain's largest regional drama producer with some of Britain's best
known programmes.

"I am sure that Carolyn Reynolds and Sean Marley and the whole team will
lead the company into its next era of growth. ALL3MEDIA welcomes everyone in
the Mersey family to Britain's foremost Independent TV production group."

Notes to Editors:

For more information about Mersey TV see www.merseytv.com

For more information about ALL3MEDIA see www.all3media.com

Source: Mersey Television Company and ALL3MEDIA

Mersey TV, Phil Redmond, Tel: +44-(0)-151-722-9122, ALL3MEDIA, Steve Morrison, Tel: +44-(0)20-7554-1400, Richard Constant, Candace Carpenter, Gavin Anderson & Company, Tel: +44-(0)20-7554-1400

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