NZ Radio stake for O'Reilly

A consortium backed by Independent Newspapers has won the bidding for Radio New Zealand, the country's largest radio network, oubidding GWR, the fast-growing UK regional radio group.

Independent Newspapers, controlled by Tony O'Reilly, will have a stake of about 15 per cent, held indirectly through two associate companies, New Zealand publishing group Wilson & Horton and Australian Provincial Papers. The consortium bid NZ$89m (pounds 40m) for the network.

The deal is conditional on the settlement of a suit brought by the Maori people, who have claimed jurisdiction over broadcasts that traverse their land. The case is expected to be settled soon.

A disappointed GWR, which last month announced a two-stage rights issue in part to pay for the New Zealand acquisition, said yesterday it was cancelling the second stage.

The company said in a statement: "GWR is aware of other opportunities in the Asia Pacific region that offer good potential for growth."

GWR is going ahead with its bid for East Anglian Radio, which has the support of the majority of shareholders. GWR had offered pounds 38m for RNZ and said it would go no higher.