Capital Radio to challenge MMC block on its bid for Virgin

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The Independent Online
Capital Radio yesterday hit out at the recent recommendation by the Monopolies and Mergers Commission (MMC) to block its bid for Virgin Radio, saying it intended "to challenge the MMC conclusions to ensure they are not followed in future by any other regulatory body".

Ian Irvine, chairman of Capital, also said the station had reached agreement with the Radio Authority to transmit the majority of Capital Gold programmes across its other four AM licences, starting with Kent on 23 February.

Although the bid for Virgin lapsed after Virgin accepted an alternative offer from a group led by the DJ Chris Evans, the MMC had recommended the Capital bid should be blocked unless it sold off its medium-wave station. Mr Irvine said the recommendation was made "in spite of the fact that the majority of customers supported the acquisition".

Capital sees this as an unfair move against the radio industry, whose advertising take is minuscule compared with other media such as television. A spokesman for Capital also claimed that the station, with just 7 per cent of total advertising revenue in the London area, would be unable to exert any monopolistic pressures on advertisers.

While the company discounted any calls for a judicial review, it said it would commission independent research from Case Associates to show where raising prices have driven advertisers from one media to another.

At the company's agm yesterday, the chairman's upbeat statement on trading, with advertising revenue growth in the first quarter from its two London stations, spurred the shares up 15p to close at 532p.

Anthony de Larrinaga of Panmure Gordon supported Capital's claims that most advertisers had supported the Capital bid for Virgin.

He suggested that two impending deals might give a better idea of the attitude of the President of the Board of Trade, Margaret Beckett. These are the pounds 52m bid by Johnson Press for the Home Counties newspaper group, and the potential sale by United Newspapers of United Provincial Newspapers.