Debts halt DMGT's foray into radio market

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The Independent Online

Daily Mail & General Trust will have to sell assets if it is to make large acquisitions such as its widely expected move into radio, the company has said.

The group, which publishes the Daily Mail, Mail on Sunday and London's Evening Standard, is committed to a multi-media strategy. In particular, the company is considering buying GWR, the radio company that owns the Classic FM national station, in which it already has a 29 per cent stake.

DMGT's newspaper business is successful but mature, so the group is looking to new areas for growth. Peter Williams, its finance director, said the group would have to raise funds through divestments if it is to make large purchases.

Debt stands at over £900m, which he said was as much as the company could comfortably take. "We don't want to increase our debt levels," he said.

Equally, the company is "unlikely to chose" to issue equity, he said.

Although DMGT is a listed company, it is controlled by the Rothermere family, who own about 75 per cent of the stock. Like his predecessors, the current Lord Rothermere, who chairs the company, does not like to see the size of the family holding diluted.

So, with debt and equity markets closed off, the company must sell assets if it decides to make a significant acquisition.

Mr Williams said this made big deals "less likely", adding that DMGT had reached "no conclusion" about what to do with its holding in GWR.

Aside from its national newspapers, which the group would not sell, there are other assets, which last year contributed sales of £645m to the group.