A number of former BBC World Service employees are poised to become overnight millionaires by selling their radio transmission company to Vosper Thornycroft, the Southampton-based warship and support services group, in a deal worth £95m.
The sale of Merlin Communications, which was bought from the BBC by its management and employees for £13m in 1997, is due to be announced today.
The takeover will net multimillion-pound fortunes for Fiona Lowry, the BBC executive who led the buyout and who is now chief executive of Merlin, and Kevin Cawood, another ex-BBC employee who is now the company's director of global facilities.
The management and employees of Merlin paid just £320,000 for about 40 per cent of the ordinary shares in the company when it was privatised four years ago. The venture capital groups 3i and Electra Fleming own £12.4m of preference shares in Merlin and the remainder of the ordinary shares.
Merlin has a 10-year contract to operate and maintain the BBC World Service's short and medium-wave transmitter facilities around the globe. It has also won transmission service contracts with other radio networks such as Voice of America, NHK and Radio Canada International.
The company employs about 380 people, most of them former BBC World Service and BBC Transmission employees, and will this year make a profit of about £7m on sales of £75m. Its order book, underpinned by the World Service contract, stands at £250m.
Martin Jay, Vosper's chief executive, is expected to herald the deal as a major step towards the group's target of generating £400m of sales from support services by 2004. Together with three other acquisitions in recent months, it is already on target for sales of £300m in this area. Merlin will also make a good fit with Vosper's existing transmission services contracts with the Ministry of Defence and the Government's spying centre GCHQ.
Merlin has also recently won a lucrative contract to design and build a new transmitter site for the World Service in Oman, where Vosper is bidding for a contract to supply six offshore support vessels.
Reporting a 12 per cent fall in first-half profits to £15.5m but an increased order book of £1.2bn yesterday, Mr Jay also announced that he is to step up to the chairman's job next July, replacing the former Tory cabinet minister Lord Wakeham, who will become deputy chairman. Headhunters have been appointed to look internally and externally for a successor.Reuse content