SMG has taken the decision to sell its 27.8% stake in Scottish Radio Holdings to Emap in a deal worth £90.5 million.
The shareholding was acquired for £150 million at the end of 2000 but SMG has opted to cut its losses and will put the proceeds of the sale towards debt reduction.
SRH is the prominent commercial radio broadcaster in Scotland and Northern Ireland and has other broadcasting interests in England and Eire. It also owns Score Press, which publishes local newspapers in Scotland and both Irelands.
“We have explored all the options for the stake and it is clearly now better for our shareholders that we sell the shareholding,” said Andrew Flanagan, chief executive of SMG. “We continue to focus on operating and developing our profitable, strong brands in radio, television, outdoor and cinema across national markets.”
Emap said it had no plans to make an offer for the remaining shares in SRH unless there is a bid from a third party. However, the acquisition has raised speculation about the reasons behind the departure of Emap’s radio chief executive, Tim Schoonmaker (see Emap Radio Boss Linked To Venture Capital Groups).
Gary Hughes, group finance director of Emap, commented: “We believe that there will be opportunities for consolidation within the UK radio sector now that the communications bill has been enacted. Against this background, we regard the stake in SRH as an attractive strategic asset.”
Scottish Radio Holdings said it was disappointed that SMG had ignored its offer to assist in the placing of the shares but said it looked forward to a “more constructive and mutually beneficial” relationship with Emap.
Shares in SRH were up more than 5% at 947.5p at noon today.
