Capital Radio today strengthened its takeover bid for Border Television after Granada agreed to buy the television assets of the regional TV and radio group for £50.5 million. The deal is subject to the successful completion of the acquisition of the whole Border group by Capital, which was announced last week (see Capital Radio Wins Battle For Border).
Capital Radio’s £146 million bid for Border was welcomed by shareholders, after a previous hostile bid from Scottish Radio Holdings had been rejected (see Border TV Rejects Scottish Radio Offer). Although a return bid from Scottish Radio Holdings is expected, today’s deal between Capital and Granada raises the stakes of its offer.
Chief executive of Capital Radio, David Mansfield, said: “This agreement further strengthens our bid for Border. It protects the long term future of Border’s television business with a group which is committed to the development of television assets and enables Capital to be totally focused on doing what we do best – building successful radio businesses.”
Granada is an obvious choice to buy the TV assets of Border as it already handles airtime sales and transmission for the regional group, which holds the ITV franchise for southern Scotland, Cumbria and the Isle of Man. Border’s radio assets operate under the Century brand in the north-east, north-west, and east Midlands, and the smaller Sun FM station, the acquisition of which would increase Capital’s weekly audience to 7.8 million.
Under the terms of the deal Granada has the right to buy the assets from Capital within three years. The 3-year call option has been set to prevent further complications in Granada’s proposed bid for either United News and Media or Carlton Communications, which is currently being investigated by the Competition Commission (see Granada Referred To The Competition Commission).
The agreement includes an exclusivity clause, which states that Granada cannot negotiate with any other party over the deal for a period of six months from today.
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