GWR Sells Vibe Following Competition Rebuttal
GWR is selling its stake in Vibe Radio Services to Scottish Radio Holdings after having its acquisition of Chrysalis-owned Galaxy 101 blocked by the Competition Commission (see Competition Commission Blocks GWR’s Acquisition Of Galaxy 101).
The move puts an end to GWR’s immediate plans to strengthen its position in Wales and the West, in a deal that was widely regarded as a test case for the level of consolidation that would take place following the relaxation of the radio ownership regulations.
Scottish Radio Holdings, which already owns 51% of Vibe Radio Services, has agreed to acquire the remaining stake for £17.6 million, giving it sole ownership of two important regional radio licences.
In a further blow, Ralph Bernard’s radio group has also agreed to terminate the contract that would have seen its sales house, Opus, handle airtimes sales for Vibe 101.
The decision to block GWR’s bid to buy Galaxy 101 and merge it with Vibe FM came as a surprise to many in the industry, who believed that the forthcoming Communications Bill would open the floodgates to a wave of commercial radio mergers and acquisitions (see NewsLine Column: A Spanner In The Works For Radio Consolidation?).
Ralph Bernard, GWR chairman, criticised the Competition Commission’s ruling and the proposed solutions for the deal. He said: “We have reviewed the proposed remedies and concluded that they were commercially unworkable and we were not prepared to implement them. We believe that a swift disposal of our investment is in the best interests of GWR.”
GWR has also agreed to sell all of its radio interests in Hungary to Advent International and Mezzanine Management Central Europe for £18 million in cash. The radio group, which has now sold all of its principal interests in Europe, plans to use the proceeds of both deals to further reduce its debt as it concentrates on focusing its resources on the opportunities available to it in the UK.
GWR’s financial results for the year ending 31 March 2003 will be available on NewsLine later today.
GWR Group: 020 7284 3000 www.gwrgroup.com
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