Smooth Radio deal faces investigation

Global Radio, the owner of Capital Radio and Classic FM, received a blow yesterday when its £70m purchase of Smooth Radio from Guardian Media Group was referred to the media regulator, Ofcom.

Jeremy Hunt, the Culture Secretary, has issued an "intervention notice" because the merger could affect media plurality, as Global is already the UK's biggest commercial radio operator.

Rival radio groups protested to the Department of Culture last month after GMG sold its radio business, which includes Smooth, to Global.

Ofcom will report to Mr Hunt by 28 September, when he will decide if there should be a full Competition Commission investigation.

Global and GMG have made a separate request to the Office for Fair Trading for the Competition Commission to give "fast track" approval to the merger.