Capital Radio extended its hold on the London youth market yesterday with the acquisition of a stake in Choice FM, which plays contemporary music, in a deal that values the station at up to £22.25m.
It means that Choice's founders, Patrick Berry and Stuart Reed, who each own 15.8 per cent of the privately held station, will see their stakes valued at up to £3.5m each.
Choice broadcasts "urban" music of black origin, such as rap and hip-hop, from its base in south London on 96.9FM.
The first 24-hour black radio station in the country when it launched in 1990, Choice now also has a north London operation and four digital licences. It said it needed a cash injection to meet the investment requirements of digital broadcasting.
Capital acquired a 19 per cent stake for £3.3m with an option to buy the rest in three to five years, valuing Choice at between £16m and £22.25m. Mr Berry said he was confident the station would reach the maximum value, which requires it to grow its adult audience from 277,000 to 660,000, or its share of 15 to 34-year-old listeners coveted by advertisers to 330,000, from 243,000.
Mr Berry's family moved from Jamaica to England in 1957 when he was aged five. His father had to sell the family cow to pay for the journey. Mr Berry grew up in Lewisham, south London, and left Catford Boys comprehensive with four O-levels to take his first job, a clerical position paying just £14 a week.
Mr Berry later took a degree at Middlesex University and founded Root, a black arts magazine, at the end of the 1970s.
Choice FM began with an investment from individual backers of £140,000 and £100,000 in banking facilities.Reuse content