Guardian mulls £500m bid for Capital Radio - Media - News - The Independent

Guardian mulls £500m bid for Capital Radio

Guardian Media Group yesterday confirmed its interest in buying Capital Radio as it signalled that it was determined to pull off a major acquisition to make it a leading player in the radio sector.

Capital Radio shares closed up 11 per cent at 490p, valuing the company at £403m, though analysts said that GMG, owner of The Guardian newspaper, would have to pay £500m or £550m to secure it. John Myers, who runs GMG's radio business, said Capital was an attractive target but added that no decision had been made on whether to bid for it yet.

He said: "We are looking at all the big groups and running the rule over them. Of course Capital is one of these. That doesn't mean we've settled on one company."

GMG has about £120m of cash and no debt. Mr Myers said the company was "quite able" to raise the funds necessary for a large radio acquisition.

"The market will come down to three or four players in the UK and we want to be one of them.... Clearly that means that we have to acquire as well as win licences. To get to the top three, we would have to invest substantial sums," he said.

GMG's focus on Capital and the radio sector follows a brain-storming session held by company management a week ago in Glasgow. The company had planned to spend about £500m buying out its co-owner in the Autotrader business, BC Partners, but that deal appears to have turned sour.

Analysts said Capital was the obvious bid target, as it is the market leader, it is a pure radio group and has no blocking shareholder. Emap, one of the two other big groups, also has a large magazine business, while GWR has a 29 per cent stake held by Daily Mail & General Trust.

GMG is currently a minor player in radio and it relies on another operator to sell its advertising. Over the last two years it has spent about £70m buying Scot FM and Jazz FM. That means it will not have major regulatory problems acquiring a major radio group and it can move ahead of new legislation in the Communications Bill, now passing through parliament. This will liberalise the radio ownership rules, allowing mergers among the big players and permit non-European groups to buy stations for the first time.

Mr Myers said: "By and large, we don't have to wait for the Bill. But that doesn't mean to say that we'll rush out and do a deal tomorrow."

Capital is still the UK market leader, with a 15.2 per cent share of the adult commercial audience, compared with 12.5 per cent for GWR, 12.1 per cent at Emap and 9.9 per cent for Chrysalis. However, Capital's flagship 95.8 FM London station has recently lost substantial numbers of listeners, dropping below 10 per cent of the London market, and many believe the company is in structural decline.

Richard Menzies-Gow, analyst at Dresdner Kleinwort Wasserstein, said: "Capital would instantly give them [GMG] a big infrastructure and a big position with advertisers but they would also get all Capital's problems."

Life and Style
tech
News
Paper trail: the wedding photograph found in the rubble after 9/11 – it took Elizabeth Keefe 13 years to find the people in it
newsWho are the people in this photo? It took Elizabeth Stringer Keefe 13 years to find out
Arts and Entertainment
Evil eye: Douglas Adams in 'mad genius' pose
booksNew biography sheds light on comic genius of Douglas Adams
Arts and Entertainment
Robin Thicke's video for 'Blurred Lines' has been criticised for condoning rape
music
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
FootballFull debuts don't come much more stylish than those on show here
News
i100
Life and Style
Kim Kardashian drawn backlash over her sexy swimsuit selfie, called 'disgusting' and 'nasty'
fashionCritics say magazine only pays attention to fashion trends among rich, white women
Arts and Entertainment
TVShows like Agents of S.H.I.E.L.D are little more than marketing tools
Arts and Entertainment
Hit the roof: hot-tub cinema east London
architectureFrom pools to football pitches, rooftop living is looking up
Travel
travel
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Director of Programming and Industry Engagement

£40k - £50k depending on experience: Sheffield Doc/Fest: Sheffield Doc/Fest is...

Resourcer / Junior Recruiter

£15-20k (DOE) + Benefits / Bonus: Guru Careers: Joining as a Resourcer / Juni...

Head of Design & UX / UX Architect

£55 - 70k: Guru Careers: Head of Design & UX / UX Architect is needed to join ...

Media and Entertainment Lawyer - City

Highly Competitive Salary: Austen Lloyd: CITY - A specialist opportunity with ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week