Granada to buy Border TV assets for £50m if Capital wins bid battle

Capital Radio, the company that is leading Scottish Radio Holdings in the contest to acquire Border Television, yesterday said it had signed a £50.5m deal to sell Border's TV assets to Granada, subject to the successful completion of the acquisition.

David Mansfield, Capital's chief executive, said: "This sends out a very clear message to all those who thought we might go into television. We're a radio company, and we don't want to do anything but radio."

Mr Mansfield said the money raised from the deal would help to strengthen the group's balance sheet if the Border acquisition goes ahead.

A spokesman for Capital added: "This in effect locks out Scottish Radio. Granada is the only natural buyer for Border's TV assets." The media and leisure group already has a long-established relationship with Border, controlling its airtime sales and transmission contracts.

A spokesman for Scottish Radio Holdings said: "This is a very useful reference for the value of Border's television assets." He declined to comment further.

Under the terms of the agreement, Granada will have the right to acquire the Border assets at any time over the next three years.

Mr Mansfield said the deal was "a small but important part" of Granada's preparation to take part in the wider consolidation of the ITV network.

Capital, which owns and operates commercial radio stations, and which is based in London, agreed to buy Border for about £146m last week, topping an earlier offer from Scottish, which was valued at £131m.

Capital said last Thursday that it would pay 92 shares for every 100 shares in Border, valuing each share at £13.52, with a cash alternative of £13. That beat the earlier offer of £13.02 in stock or £12.75 in cash that Scottish had promised after raising its original bid by more than 20 per cent in an attempt to stave off rivals.