Foreign giant 'to bin UK radio'
Talk Radio, XFM, Atlantic 252 and RTL Country will shortly say farewell to their Luxembourg owner
Sunday 22 February 1998
The Luxembourg-based company has appointed an adviser for the sale of its 62.1 per cent stake in Talk Radio, its 15 per cent participation in XFM, the 80 per cent share it owns of Atlantic 252 and RTL Country, owned wholly by CLT-UFA, said the source. The stakes are believed to be worth around pounds 60m. CLT-UFA, however, has officially denied it is in the process of selling its UK radio interests.
The source said the company wanted to use the money to maintain its share of Channel 5, which it owns jointly with Pearson, United News and Media and Warburg Pincus, as the TV company's capital base expands. CLT-UFA owns 29 per cent of Channel 5. "These assets have been on and off the block informally for a while, but now the company has made a formal decision to sell," said the source.
Capital Radio, still smarting from its failed bid for Virgin Radio, would be a possible buyer for Atlantic, which is licensed in Ireland but which can be received all over the British Isles. Capital Radio's desire to expand through acquisition by purchasing Virgin Radio was stalled by UK competition authorities before the station was snatched from under its nose by DJ Chris Evans.
Last week CLT-UFA, a joint venture between Belgium's Audiofina and Germany's Bertelsmann, reported losses of pounds 50m in its first year of its existence. The losses were blamed on the start-up costs of new operations, which included Channel 5, launched last year.
"They won't have any problem selling, but if they are seen as wanting to get out of their radio operations quickly they won't get such a good price," said Mike Hilton, media analyst with Kleinwort Benson.
Relatively little known in this country, CLT-UFA is an enormous operation with television and radio stations in 11 European countries and in Canada. It is joint-owned by Bertelsmann, which despite being Germany's biggest media company, is still privately owned and Audiofina, the media holding company owned by the Belgian financier Albert Frere. Mr Frere, who made his fortune in the steel industry of southern Belgium, is one of Europe's most influential but secretive media investors, who rarely gives any interviews.
CLT-UFA said on Friday it will make a gross capital gain of LFr2.2bn (pounds 36m) on the sale of a 20 per cent stake in the French digital television station TPS. It sold the stake to the French water-to-television conglomerate Suez-Lyonnaise des Eaux and M6-Metropole Television. A spokeswoman for CLT said the sale was part of a general restructuring of CLT-UFA.
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