Chrysalis Radio To Sell For £170 Million
Chrysalis is to sell its radio operations to Global Radio, an investment vehicle chaired by former ITV CEO Charles Allen, for £170 million.
Chrysalis says that it expects to make a £95 million profit on the deal. The disposal of its radio operations will leave Chrysalis with just its music division, following the disposal of its book publishing and TV operations.
The sale comes about as part of a strategic review ordered by Chrysalis in February this year.
The deal has not yet been approved by the group’s shareholders but Chrysalis estimates that on completion shareholders can look forward to a return of capital between £90 million and £100 million.
The disposal also marks the return of Charles Allen to the media world after he announced his resignation from ITV last year (see Charles Allen Leaves ITV).
The newly-formed Global Radio is backed by Barchester Healthcare, whose investors include Denis Brosnan. Directors include Barchester executive Owen McGartoll and Ashley Tabor.
Phil Riley, chief executive of Chrysalis Radio, is expected to continue running the radio division and so will step down from the Chrysalis board once the sale is finalised.
Don Thompson, commercial director at the radio division, will also stay on following the completion of the deal.
Meanwhile, Richard Huntingford, Chrysalis chief executive, will leave the company following the disposal. Talking to MediaGuardian.co.uk, he said: “Chrysalis had TV, radio, books and music – now it’s just a music business. It won’t need a group plc management structure and it won’t need a group chief executive or group finance people.”
Huntingford said of the sale: “We believe that the sale of Chrysalis Radio as a complete entity meets the objectives of our strategic review of facilitating its participation in the longer term development of UK commercial radio and deriving good value for shareholders. This has been a thorough review process which has delivered a good result.”
Chris Wright, Chrysalis chairman, said: “Chrysalis Music is well placed to build upon and exploit its position as a leading international, independent music business. It operates in a growing market and has valuable positions within it. As with Chrysalis Radio, we will continue to monitor the performance and positioning of this business, for the benefit of all stakeholders.”
Chrysalis Radio’s revenues declined 9.1% for the six months to February this year, to £30.1 million. However, its full year revenues are expected to be stable.
Chrysalis: 020 7221 2213 www.chrysalis.com