The case was brought by Guardian Media, part of the Guardian newspaper group, which owns 20 per cent of TWC. It is prevented by cross-media ownership rules from having a bigger stake and may now appeal.
Emap now owns three local radio licences. If its bid for TWC is successful, it will have eight - two more than the maximum allowed by secondary legislation under the 1990 Broadcasting Act.
Guardian had sought to challenge the Radio Authority's approval of a scheme under which Emap intends to put two licences into Radio City 1994, a 'deadlocked' company. Emap and Schroders, its merchant bank, will each hold 50 per cent of Radio City's equity.
The authority's decision, upheld by Mr Justice Schiemann, was that as neither had control of the company, neither would own the licences for the purposes of the legislative maximum.
He made the decision despite the fact that Schroders has no commercial interest in the investment. Option arrangements ensure that at any time Emap can force Schroders to sell it its shares for a nominal sum. Similarly, Schroders can force Emap to buy its shares at any time.
Emap has to post its offer document for TWC by next Monday. In the meantime it hopes to open talks with the previously hostile board of TWC.
Either way, it has control of TWC as Owen Oyston, the media owner, has already agreed to accept the 181p-a-share bid in respect of his 22.1 per cent stake. Emap already owns 29.5 per cent of TWC.
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