The City was not impressed by Capital’s move on Tuesday to buy Virgin Radio for £64.7m. The London radio group’s share price initially fell 6p to 539p and then dropped throughout the week to finish at 531.5p on Friday.
BSkyB also had a busy week. On Wednesday it announced both an increase of 21% in profits to £215m and its much-rumoured digital tie-up with BT, Midland Bank and Mitsubishi. It also transpired on Friday that Goldman Sachs, the American investment bank, had placed 20 million BSkyB shares for sale at 582p each. It is rumoured that this may represent a large chunk of Pearson’s stake in the satellite broadcaster. As a result of these developments BSkyB’s share price rose initially on news of the strong results (up 4.5 to 601p), but then fell to 586p by Friday – probably as a result of the Goldman Sachs move.
Pearson appeared to benefit from the BSkyB rumour, with its stock increasing 5p to close at 716.5p on Friday. It was probably also strengthened by rumours that its new chief executive Marjorie Scardino is looking to acquire the Australian Financial Review and an American magazine called the Institutional Investor.
The market liked United News & Media’s announcement on Thursday that it would join DTN’s digital terrestrial TV bid if the consortium manages to win the commercial licence. UNM strengthened 13p to close at 768.5p.
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