GWR considering selling radio stations in London and Europe

GWR, the cash-strapped radio group, is considering selling its stake in the London stations LBC and News Direct, as well as seeking to dispose of its European assets.

The company, which also owns Classic FM and 38 local UK stations, is undertaking a strategic review to identify non-core assets. As part of the exercise, it is looking at options for its unique talk-only stations for the capital, LBC and News Direct, a 24-hour rolling news service.

GWR, which is reporting interim results on Tuesday, has a 20 per cent stake in the stations, which are held within a company called LNR. Reuters and ITN are the other shareholders.

LBC became more valuable after the Radio Authority agreed to allow it to switch from an AM frequency to FM. This will allow the station to reach a wider audience and charge more for advertising. Although the music-based London radio market is highly competitive, LBC has no competitors as a talk-only station for the capital.

GWR has said it wants more focus and it is thought the minority shareholding in these London stations does not fit with its future plans.

Industry sources claim GWR is "touting round" its non-core assets. Although radio companies are suffering from the downturn, some are looking to acquire UK assets ahead of an expected shake-up in media ownership rules. Often deals can be structured to "park" acquisitions until the law changes to allow full ownership.

GWR has decided to concentrate on the UK market. Its main asset in Europe is Hungary's largest commercial station, Danubius, which reaches more than 3.7 million listeners. Its Austrian operations are led by its flagship station in Vienna, Antenne Wien.

GWR has suffered from a sharp fall in advertising revenues, along with the rest of the media sector. In September, it warned underlying revenues were running 3.5 per cent below the interim period last year. National advertising sales had dropped 8 per cent. Williams de Broe, the broker, is forecasting a 28 per cent drop in profits for the half-year to 30 September.