MacKenzie loses backing for takeover of Wireless

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The Independent Online

Wireless Group has ended talks about a £100m buyout with its chairman and chief executive, Kelvin MacKenzie, after he fell out with his private equity backers.

Wireless Group has ended talks about a £100m buyout with its chairman and chief executive, Kelvin MacKenzie, after he fell out with his private equity backers.

The radio company, which owns the talkSPORT national speech-only station, also revealed the group had been approached by other parties since Mr MacKenzie's interest in buying emerged this month.

Wireless did not name the other potential bidders. Industry sources speculated that Chrysalis, the radio business that owns the Heart brand, was likely to have approached Wireless. Chrysalis bought two speech-only stations a couple of years ago, LBC and News Direct, which serve the London market.

Mr MacKenzie is now looking for new financial backers to fund his planned bid. It is understood that he and his previous financiers, Veronis Suhler Stevenson (VSS), could not agree on Mr MacKenzie's "personal terms" in the deal - analysts said this could refer to his role or the size of stake he was being offered in the business once it had been taken private. He owns 6 per cent of Wireless.

Mr MacKenzie, a forthright former editor of The Sun newspaper, declined to comment but it is understood that he felt that VSS "do not know how to work with creative entrepreneurs".

VSS, which is based in the US, said it did not comment on specific deals. City sources said Mr MacKenzie's criticism was odd, given that VSS specialises in the media industry and is considered to be one of the most savvy investors in the sector. In the UK, VSS used to own Centaur, the business magazine group, which was floated on the stock market last year.

It is not clear that Mr MacKenzie would have succeeded with his 90p-a-share indicative approach anyway. It offered no premium to the company's share price at the time.

The non-executive directors at Wireless had given Mr MacKenzie until 21 March to come forward with a fully funded bid and complete due diligence, without saying whether they would recommend 90p a share. One radio executive said: "The fact that the Wireless non-executives were entertaining a nil-premium offer would have brought other private equity backers out of the woodwork."

Wireless also owns a number of local radio stations, although as a group it has never reported a pre-tax profit. Analysts said few trade buyers would be interested in the main asset of Wireless, talkSPORT, as speech-only is not popular in the commercial sector.

Media companies outside the radio sector could be interested in the group, however. It was suggested that Daily Mail & General Trust or Richard Desmond's Northern & Shell group may consider buying Wireless.

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