No chance. TVS was in financial difficulties already and would have had to pay £50 million a year for its licence. No way it would be in a position to take over anyone. It would have been sold fairly cheaply to a company with deep pockets
Which company do you have in mind? The £59.8m a year for its licence would have been offputting to any company wishing to take over TVS but then Granada took over Yorkshire that was paying out £37.7m a year in a region with less advertising revenue. LWT was only paying out £7.59m a year. If TVS and LWT merged then it would have been on average £33.7m per region. Less than the £36.5m a year that Meridian ended up paying.
It would have had to have been one of the large ITV companies as TVS would have been financially unviable. TSW, HTV, Yorkshire and Tyne Tees were all in the same boat, HTV rather less so than the others and it just about managed to stay afloat until the rules were relaxed a few years into the franchise. They were in no position whatsoever to be capable of making acquisitions.
YTV and especially TTT were torpedoed by their very high bids. Neither company was viable as a separate entity which is why the merger was allowed in 1992 in order to give them a head start in reorganizing.
TSW and TVS were over the line. If they had been given the franchises under the terms of their respective bids, they could not have remained independent for long. They would have been takeover targets, and completely incapable of acquiring anyone else, let alone LWT. Independent, at least one of them would have likely gone bust (or had their licence revoked) without external help, given that the early ITC was not minded to allow them to reduce quality by much. Even with the YTV takeover, their plans for TTT (very) nearly resulted in licence revocation of the North East contract in 1993.