Chrysalis has decided to initiate a formal review of its strategic operations, which could lead to a demerger of its radio and music businesses.
The company has hired Hawkpoint Partners to assist with the review, with the company’s founder and 26% majority shareholder, Chris Wright, said to be coming round to the suggestion put forward by Schroder, the second largest shareholder, that the radio business should be sold off.
In a statement to the City, the company said: “In the light of continued consolidation activity in the UK radio sector, the board has decided to initiate a formal review of the strategic options to best facilitate Chrysalis Radio’s participation in the longer term development of UK commercial radio.
“The review will be wide-ranging and will assess all options which can deliver maximum value to Chrysalis shareholders, including a potential demerger of the radio and music businesses.”
Richard Huntingford, Chrysalis chief executive, said: “The valuable market positions we have created at Chrysalis Radio, coupled with the ongoing consolidation in UK radio, suggest that now is an appropriate time to consider a formal review of our strategic options in this area.
“The latest Rajars and current trading confirm that we start this process from a position of considerable strength. We have no pre-conceived view on the outcome of the review, other than a commitment to ensure Chrysalis Radio’s participation in the long term development of the UK radio sector and thereby deliver the greatest benefit to all stakeholders, including shareholders, listeners, advertisers and employees.”
Last week Chrysalis revealed that its radio division saw revenues grow 5% year on year in January, after suffering a 10% decline for the four months to December 31 (see Chrysalis Revenues Increase In January).
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