Defiant Emap offers pounds 71m final bid for Trans World: Controversial deal faces court challenge by Guardian Media

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The Independent Online
EMAP has launched a pounds 71m bid for the radio group Trans World Communications, despite the fact that Guardian Media intends to challenge the structure of its proposed acquisition in the courts.

The publishing group, which owns 29.6 per cent of Trans World, is offering 181p a share and has declared its bid final.

Emap, in effect, already has control of Trans World since it has an irrevocable undertaking to accept from Owen Oyston, the entrepreneur, who owns 22 per cent.

Robin Miller, Emap's chief executive, said the bid would be declared unconditional regarding acceptances as soon as the offer document had been mailed to shareholders, and Mr Oyston had completed the formalities.

The deal is highly controversial because Emap plans to use a complex corporate structure to get around the fact that if it buys Trans World it will end up owning eight radio licences - two more than the permitted maximum.

It proposes setting up a holding company with its merchant bank, Schroders, which will 'buy' Trans World's two 'Radio City' licences. It will pay Emap in interest-bearing loan stock.

But as the shareholding structure will be deadlocked between Emap and Schroders, the publisher, supported by the Radio Authority, believes it cannot be deemed to control the licences under the broadcasting legislation.

Emap will nevertheless have operational control of the licences and has an option under which it can force Schroders to sell it its stake in the holding company for a nominal sum. Mr Miller stressed that Emap could exercise such rights only with the consent of the Radio Authority.

The authority, which wants the Government to simplify the radio ownership rules and remove the licence ceiling, met on Tuesday and decided to reconfirm its support for Emap's proposals.

Guardian, which has 20 per cent of Trans World, wants a judicial review of the authority's verdict. A hearing for leave to bring the case will be heard on Monday.

The outcome is being anxiously watched. If the scheme gets the backing of the court, it is likely to spark a flood of similar deals.

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