GWR drops out of Melody Radio auction as sale price reaches pounds 25m

GWR, the radio group, has pulled out of the bidding for Melody Radio after the auction for the "easy listening" station pushed its sale price up to pounds 25m - at least pounds 5m more than most analysts had expected it to fetch.

According to industry sources, GWR, which operates radio stations in the west of England and on the south coast, felt the price had got too high. The company is also believed to have pulled out because, in the case of a successful bid, it would have surpassed regulatory limits on the share of the audience any radio operator is allowed to control.

A spokesman for GWR declined to comment on the news, which came on the day that final bids for Melody Radio were submitted to Hanson, the building materials group which has put it up for sale. Although Hanson did not disclose the number of offers it had received, GWR's withdrawal is thought to leave three serious bidders in the race - Emap, Scottish Radio and Chrysalis.

The high price on offer for Melody will surprise the industry. Although the station has a large number of listeners, they fall into the older age ranges that are less attractive to advertisers.

- Peter Thal Larsen