Capital Radio's pounds 87m Virgin bid may fall foul of MMC advertising objections
Friday 14 November 1997
Capital is known to have spent some time discussing the effect of its pounds 87m bid for Virgin on the London advertising market. According to City sources, the MMC investigation is likely to recommend that the Virgin and Capital advertising sales operations are kept separate in the interests of competition.
Capital's group chief executive, David Mansfield, would not comment yesterday on discussions with the MMC.
However, he confirmed that Capital's share of the advertising market would inevitably be one of the main points under scrutiny.
Mr Mansfield added that he expected the Department of Trade and Industry to pronounce on the merger early next year, some weeks later than expected.
Capital already has the biggest share of national radio advertising, with 35 per cent of the market. Virgin has a further 8 per cent.
Chris Evans, the celebrity DJ known as the "ginger whinger", has approached Virgin with a rival bid. Although Mr Evans is believed to be offering less than Capital, he is backed by Apax Partners, the venture capital company, and Virgin said yesterday it was taking the offer "seriously".
A Virgin Radio spokesman said Mr Evans' offer would enable Richard Branson to get a foothold in British television. "The deal with Evans, which we're still not too clear about, involves a merger which would give Branson some control over Ginger [Productions, Mr Evans' broadcasting company]."
Mr Mansfield said he was "not concerned" about the rival bid, and added that Mr Branson had "a lot of respect" for Capital. "He wants to join us round the Capital table," he said.
Capital is unlikely to get into an auction with Mr Evans, and is keen to tie up an exclusive agreement with Virgin in order to foil the DJ's counter offer.
The news coincided with changes to the terms of Capital's offer for Virgin, although Capital denied yesterday that the two events were related. The alterations, prompted by the decline in Capital's share-price, will see Mr Branson's shareholding in the company capped at under 10 per cent, and - although the pounds 87m price remains fixed - more cash than shares will be offered in order to avoid diluting earnings per share.
Mr Mansfield, who became chief executive after Richard Eyre left for ITV Network Centre, yesterday reported headline profit before tax of pounds 35m, up 9.2 per cent. The dividend increased 10 per cent to 13.75p. He said that since the acquisition of the My Kinda Town restaurants business last year, Capital had evolved into a "music-based entertainment company".
He added that the Radio Cafe concept would be expanded, with many more in the London area and one each in Birmingham and Southampton. There is presently just one Radio Cafe in London's Leicester Square. Mr Mansfield sought to assuage City concerns about the expansion into catering with news that the development would be funded by restaurants disposals. Despite this, though, Capital's shares slid 11.5p to 472p.
Evans' bid for Virgin, page 3
- 1 Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 The secret report that helps Israel hide facts
- 4 Israel's propaganda machine is finally starting to misfire
- 5 'Hello mum, this is going to be hard for you to read ...'
Sally Farmiloe dead: Howards' Way actress, and former mistress of Jeffrey Archer, dies aged 60
Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...