DMG Radio's sale of stake in GWR could spark bidding war

DMG Radio is considering selling its stake in GWR Group, owner of Classic FM. City analysts said yesterday a sale by DMG would spark a bidding war for GWR, one of the biggest commercial radio players in the UK.

DMG, which is owned by Daily Mail and General Trust, is GWR's biggest shareholder, with a 19 per cent stake worth pounds 37m. Other broadcasters could be interested in buying GWR, although many would have monopoly problems. GWR would also attract interest from regional press publishers. The radio group, which last night had a market value of pounds 194m, could be worth around pounds 250m.

GWR would probably be broken up after a sale. Some of the stations broadcasting on AM could be sold separately.

DMG would not comment yesterday but market sources confirmed a sale of the GWR stake was being considered.

The news comes almost exactly a month after EMI, the music group, bought 4 million GWR shares, taking its stake in the company to 13.58 per cent. Industry observers said yesterday that EMI had increased its shareholding after market rumours that DMG was to sell out. EMI is highly unlikely to launch a bid for GWR.

EMI bought the shares after Capital Radio sold its 13 per cent holding in GWR, raising pounds 28m. Capital said it wanted to focus on wholly owned radio stations. EMI is now GWR's second-largest shareholder.

GWR has underperformed the market by nearly 30 per cent in the past year. The shares were unchanged last night at 178.5p.

Rumours have circulated in the City for some weeks that DMG's parent, which also owns the Daily Mail newspaper, was gearing up for a big acquisition. A sale of the GWR stake adds credence to that theory.

DMG's attempts to become a significant commercial radio player in the UK have so far been thwarted. At the beginning of the year, the company failed in its bid to buy 80 per cent of Leicester Sound because of competition concerns. DMG has instead focused on other countries where regulatory problems do not arise.

Last month, the company spent A$88m (pounds 40m) acquiring 25 AM and FM stations in Australia.

News
peoplePaper attempts to defend itself
Voices
voicesWe desperately need men to be feminists too
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Syria air strikes: ‘Peace President’ Obama had to take stronger action against Isis after beheadings

Robert Fisk on Syria air strikes

‘Peace President’ Obama had to take stronger action against Isis after beheadings
Will Lindsay Lohan's West End debut be a turnaround moment for her career?

Lindsay Lohan's West End debut

Will this be a turnaround moment for her career?
'The Crocodile Under the Bed': Judith Kerr's follow-up to 'The Tiger Who Came to Tea'

The follow-up to 'The Tiger Who Came to Tea'

Judith Kerr on what inspired her latest animal intruder - 'The Crocodile Under the Bed' - which has taken 46 years to get into print
BBC Television Centre: A nostalgic wander through the sets, studios and ghosts of programmes past

BBC Television Centre

A nostalgic wander through the sets, studios and ghosts of programmes past
Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum