Jazz FM team in £50m radio deal

The former management team of Jazz FM, headed by Richard Wheatly and Alistair Mackenzie, yesterday completed the £50m acquisition of Radio Investments, the loss-making group of local radio stations owned jointly by the Classic FM owner GWR, Guardian Media Group and Caledonia Investments.

Sources close to the management team said that employees at Radio Investments, which has a turnover of about £12m and last year reported a near £4m loss, would be told the news today.

Mr Wheatly's team is being backed by Bridgewell, the financial adviser, which is underwriting the issue of new shares in the company. Radio Investments has been doing the rounds of City institutions in the past few days in the hope of attracting £50m of new equity. Last night, Bridgewell said the issue had been fully subscribed, although some of the shares would end up with the firm's market makers.

One radio expert said he was astounded by the high valuation put on the company given its modest turnover, its portfolio of radio stations and its loss last year. "The last time I saw so many dogs was at Battersea," he said. That view was contradicted by sources close to Bridgewell, who said the City presentations had gone well.