Luxembourg multimedia group bids for Chiltern

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The Independent Online
Consolidation in the radio industry took an unexpected twist yesterday, when Cie Luxembourgeoise de Telediffusion made a recommended 242p-a-share offer for Chiltern Radio, valuing the company at pounds 16.9m, writes Gail Counsell.

An offer for Chiltern had been expected, but the identity of the bidder came as a surprise.

The privately owned Luxembourg-based multimedia group, which had sales of pounds 1.45bn last year, has extensive European radio interests.

A former owner of Radio Luxembourg, CLT owns 80 per cent of Atlantic 252, the Irish-based commercial radio station that transmits to about two-thirds of Britain, and operates 13 other Continental radio outlets. It also manages eight television channels on mainland Europe.

Nevertheless, Capital Radio - which has 20 per cent of Chiltern - and, until recently, MAI, Lord Hollick's media group, which earlier this month sold its 18.5 per cent to the Daily Mail and General Trust, were both considered more likely candidates to bid.

The price represents a premium of 18.3 per cent over Tuesday's share price of 205p, but the shares have been strong recently as rumours of a bid swept the market. Yesterday the shares, priced at 94p last December, rose 33p to 238p.

Chiltern, which operates local radio stations in the Home Counties and West Country, and which also owns 25 per cent of Network News (Radio), made a pre-tax loss of pounds 246,000 in the year to September 1993 on sales of pounds 5.8m, partly because of heavy spending on new systems.

But it returned to profit in the second half of last year and this year brokers expect it to make profits of about pounds 400,000 against a background of improving advertising income.