In order to keep below limits on radio licence ownership, GWR is selling its controlling stake in Leicester Sound and an 11 per cent holding in London News Radio to the Daily Mail group. It will also sell a number of AM licences, including Severn Sound.
But it wants to keep its Severn Sound FM station, which overlaps with Wyvern FM's audience area. As a result, it will need the approval of the Radio Authority under the public interest test. GWR said yesterday the Authority would rule by March. If the decision goes against GWR, one of the two stations will be wholly or partly sold.
The offer for Radio Wyvern is for 755p a share, plus a notional interest payment of not less than 24p a share. Wyvern shareholders can also choose to accept 4.1 new GWR shares for each Radio Wyvern share, worth 769p at GWR's close last night of 187.5p. Those electing for the share alternative would also receive the 24p notional interest payment.
GWR has received the backing of directors holding 20 per cent of the shares, as well as irrevocable acceptances from shareholders speaking for a further 37 per cent.
Radio Wyvern had pre-tax profits in the year to September of pounds 44,910, down from pounds 127,938 the year before. GWR said the acquisition would be earnings-enhancing from next year.
Henry Meakin, chairman of GWR, said the Radio Wyvern would be "a strong geographic fit with the group's existing operations in the surrounding area."
Sir John Cotterell, chairman of Radio Wyvern, said: "We are convinced that we should now become part of a larger operation," calling GWR "the most successful company in UK radio broadcasting".
GWR has been one of the most aggressive companies in the commercial radio sector. Rebuffed in its attempts to buy a New Zealand radio company earlier this year, it has concentrated on building its domestic base. GWR's partly owned LNR is one of 25 bidders for the last remaining London FM licence, to be awarded next month.