Capital Radio poised to sell 13% stake in GWR

Capital Radio is poised to sell its stake in GWR, owner of Classic FM, as part of a move by the company to concentrate on its wholly owned stations.

Capital has a 13 per cent stake in GWR, bought five years ago and worth pounds 28m. It is likely to place the shares with institutions, although a sale to another radio station is not thought to have been entirely ruled out. The disposal is expected to be completed within a week.

A Capital spokesperson said the company was reviewing its holding in GWR, but would not comment further.

Capital has been looking at its interests in GWR for some months, but a decision has been catalysed by the imminent departure of Richard Eyre, chief executive. Mr Eyre joins ITV as chief executive this week. His replacement at Capital, David Mansfield, previously group managing director, has been conducting a strategic review.

He has decided to focus on Virgin Radio, for which Capital bid pounds 64.7m in May this year. However, the takeover was referred to the Monopolies and Mergers Commission last month, and it is by no means certain that it will be cleared. The MMC is to reach a decision next month.

GWR's other big shareholders include Daily Mail and General Trust (DMGT) and EMI Group. DMGT, which owns just over 19 per cent of GWR, is keen to expand in radio in the UK and could be interested in buying some of Capital's stake. The media group, GWR's largest shareholder, failed in its bid to buy 80 per cent of Leicester Sound from GWR at the beginning of the year because of monopolies concerns.