HG Capital To Bid For Virgin Radio

The former head of Emap PLC’s radio business is working on a bid for Scottish Media Group’s (SMG) Virgin radio with private equity group HG Capital.

Tim Schoonmaker has been hired in an advisory capacity, but is reported to take an offer for the broadcaster if SMG is forced to auction Virgin to the highest bidder.

In a report in Sunday’s Observer he told the paper: “We have let the relevant people know that we are interested.”

Industry speculation reveals that other private equity groups are interested in purchasing Virgin Radio, with Apax partners and Chrysalis all thought to be interested.

Recently, SMG turned down a £100 million offer for the station from 3i, fronted by media mogul, Waheed Alli. Lord Alli made his first offer for Virgin before Christmas and is trying to persuade SMG’s largest shareholders, including ITV and Fidelity, to put pressure on the SMG board to accept his offer. He is due to meet the board this week.

Rumours of SMG’s possible disposal have been rife since last June, when the Group was thought to be sounding out potential buyers for the station. It was believed that the Scottish media conglomerate hoped to sell Virgin for £130 million.

Virgin radio has recently been struggling with falling profits, the most recent RAJAR results revealed that the company lost 4.4% of its weekly reach year on year in the six months to December, but that it managed to maintain its 1.4% audience share.

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