Wireless sells Scot FM to Guardian

Wireless Group, the radio company chaired by Kelvin MacKenzie, will announce today it has sold loss-making Scot FM to the third highest bidder.

Guardian Media Group is paying £25.5m in cash and loan notes for the station, or 13 times its annual revenues, in a deal that allows Wireless to clear its debts. A spokesman for Wireless said the company had rejected two higher offers for Scot FM as Guardian Media was able to complete the deal quickly while the other two offers faced significant delays.

Scottish Radio Holdings offered £29m but its deal would have required Competition Commission referral because it owns rival stations in Scotland. Chrysalis, the media group, offered £27.5m but is believed to have been unable to put the financing for the bid together.

Analysts were surprised that Wireless sold Scot FM, widely regarded as one of its best assets, rather than offloading some of its 18 smaller stations. Wireless bought Scot FM, which broadcasts in central Scotland, in December 1999 as part of its takeover of Independent Radio Group. At the time it was valued at £10m.

Scot FM made a pre-tax loss of £0.9m in the year to December on sales of £1.9m.