Capital and GWR confirm merger talks to create £700m radio giant

Capital Radio and GWR admitted yesterday that they are in talks over a £700m merger of equals, a deal that will kick-start the long-awaited consolidation of the UK commercial radio industry.

Capital Radio and GWR admitted yesterday that they are in talks over a £700m merger of equals, a deal that will kick-start the long-awaited consolidation of the UK commercial radio industry.

The pair responded to days of speculation that they are close to forming a radio giant with an estimated 40 per cent share of the advertising market and a portfolio of stations including Classic FM and the biggest London station, Capital 95.8FM.

The companies said: "The boards of Capital and GWR note recent press speculation and confirm they are currently in discussions concerning the possibility of a nil-premium all-share merger. These discussions are ongoing and may or may not lead to a transaction." Despite the cautious tone of the statement, discussions are understood to be close to fruition, with management positions already decided and plans to achieve annual cost savings of at least £8m.

GWR owns the national Classic FM station, as well as dozens of local stations. Capital has the leading position in London and a regional network. There is very little overlap between the two companies' local licences and as a result, the groups are confident of pushing through the deal without arousing serious competition concerns.

Consolidation in the industry has been possible since the liberalisation of media ownership laws at the start of 2004. The Capital-GWR merger is seen as the easiest deal to do, because the two are the only pure play radio companies. Emap, the owner of Kiss 100 FM, Chrysalis, the owner of the Heart stations, and SMG, the owner of Virgin, all have other substantial media interests.

Capital and GWR have talked in the past, but it is believed that personal issues and valuation questions have scuppered a deal.

The Independent reported on Saturday that the top management jobs at the combined Capital-GWR had been decided. Ralph Bernard, the executive chairman of GWR, is expected to take the same position after the merger, with the Capital boss, David Mansfield, becoming chief executive.

Shareholders will be nervous over whether these two industry veterans will be able to work together without friction, but the pair have agreed defined areas of influence. Mr Bernard is seen as an ambassador for digital radio and defining strategy in this area is likely to be central to his responsibilities, while Mr Mansfield has a more commercial background and is seen as strongest in driving advertising revenues.

Capital shares rose 7 per cent last week as speculation mounted that it was making encouraging progress in talks with GWR. Capital is marginally the senior partner, its market value being £367m compared with GWR's £343m after its shares rose 4 per cent last week.

The pair have moved closer together as the advertising recovery fed through to improved performance at GWR, while Capital shares have fallen on concerns that listeners will desert its flagship station after the departure of Chris Tarrant from the breakfast show. Johnny Vaughan, his replacement, has got off to a shaky start.

News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Sport
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
PROMOTED VIDEO
News
people
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Sport
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Sport
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
News
i100
News
i100
Sport
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
boxing
News
people''Women's rights is too often synonymous with man-hating'
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

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
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments