Granada is set to take an 18.6% stake in Scottish Media Group (SMG) off the hands of Mirror Group for approximately £110 million. The deal is conditional upon agreement from Mirror Group shareholders at its Extraordinary General Meeting on 30 March.
Mirror said it wished to dispose of the holding, described as a non-core asset, earlier in the month (see Mirror Group Seeks Shareholder Approval Of £108m Scottish Media Disposal). As Mirror is embroiled in takeover bids from Trinity International and Regional Independent Media any sale of its assets must receive shareholder approval in order to avoid an investigation by the Takeover Panel.
It is likely that Mirror shareholder’s will accept Granada’s offer which values the stake at 915p per share. Mirror had previously said it would only entertain offers of 900p per share or greater.
Granada already owns the LWT, Yorkshire, Tyne Tees and Granada Television ITV franchise licences. SMG operates the Scottish Television franchise. However, Granada says that it does not intend to making an offer for the whole of Scottish Media, although it reserves the right to do so if another party acquires or bids for a stake of 15% or more in SMG.
Charles Allen, Granada chief executive, says: “We are delighted to have the opportunity to make this investment in Scotland’s premier media company. We look forward to working with SMG in the future to the benefit of both sets of shareholders.”
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