GWR Group has denied speculation that it is currently holding talks with Capital Radio about a potential £840 million merger of the two companies to be completed later this year.
The
Sunday Express reported that GWR chairman, Ralph Bernard, has been in formal talks with Capital Radio chief executive, David Mansfield, about the two radio giants taking advantage of the recently relaxed radio ownership regulations to merge sometime within the next six months.
However, GWR this morning moved to quash the rumours with a statement saying: “In response to press speculation over the weekend with regard to formal discussions between GWR and Capital Radio, GWR Group states that it is not in discussions with Capital Radio.”
It has been widely accepted that the relaxation of the radio ownership regulations under the Government’s new Communications Act would trigger a wave of consolidation in commercial radio industry, with the sector’s biggest players vying for supremacy in the newly deregulated market.
The plans to allow just two commercial radio groups to operate alongside the BBC in any local area clear the way for a number of potential mergers that could see either Capital or GWR join with a number of other radio groups.
Capital has been viewed as a prime take-over target for global conglomerates such as Clear Channel or Viacom. However, the group’s chief executive, David Mansfield, recently moved to rule out a potential take-over by American-owned Clear Channel, describing ‘fundamental cultural differences’ between the two companies (see Capital Radio Chief Moves To Quash Clear Channel Takeover).
The anticipated raft of mergers and acquisitions in the commercial radio market has not come as quickly as expected. GWR was recently forced to sell its stake in Vibe Radio Services after having its acquisition of Chrysalis-owned Galaxy 101 blocked by the Competition Commission (see GWR Sells Vibe Following Competition Rebuttal).
However, some of the industry’s smaller players have been making moves, with SMG recently selling its 27.8% stake in Scottish Radio Holdings to Emap for £90.5 million (see SMG Sells Radio Stake To Reduce Debts). The Wireless Group also strengthened its position in the local radio market with the acquisition of Forever Broadcasting for £8.1 million (see Wireless Group Secures Forever For £8.1 Million).
GWR Group shares were up 1.5% at 304.5p and Capital Radio’s were up 1.2% at 529p.
