DMGT gives go ahead to Capital/GWR deal

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The Independent Online

Daily Mail & General Trust has dropped its objections to the merger of GWR and Capital Radio, paving the way for an announcement of the terms of the £700m deal today.

Daily Mail & General Trust has dropped its objections to the merger of GWR and Capital Radio, paving the way for an announcement of the terms of the £700m deal today.

DMGT has a 29.9 per cent stake in GWR, making the merger dependent on its support. Peter Williams, DMGT's finance director, will have a seat on the board of the proposed combined company.

There had been some doubt over whether DMGT, which will own 15 per cent of the enlarged company, would be granted board-level representation at the combined business. There had also been suggestions that DMGT was unhappy at the process for appointing the top management team.

One industry source said: "Things would not have got this far if DMGT were not comfortable with the concept of the merger. However, there were a few specific issues that it wanted to make sure were appropriately dealt with."

At the end of last week, shares of GWR and Capital Radio suffered on fears of last-minute hitches to the merger.

On 19 September, the companies admitted to being "in discussions concerning the possibility of a nil-premium all share merger" after a report in The Independent. Analysts believe the deal would achieve cost-savings of some £8m a year.

David Mansfield, Capital's chief executive, will hold the same position at the combined company. Ralph Bernard, GWR's executive chairman, will retain the same title and will drive group strategy. There is likely to be much focus on the future strategy for Capital's 95.8FM station, which has been hit by a sharp drop in listeners.

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