Express Newspapers owner, Richard Desmond, is considering a bid for Virgin Radio, according to a report in yesterday’s Observer newspaper. It is understood that Desmond has discussed the possible acquisition with the Board of his company, Northern & Shell (N&S), although a bid is not thought to be imminent.
Analysts believe that N&S might lack the financial muscle to acquire SMG-owned Virgin, which has been valued at over £150 million. It is also likely that SMG would be unwilling to part with Virgin Radio, which is widely-regarded as the jewel in its crown. However, the group has accumulated a sizeable debt burden and is preparing to sell its newspaper and magazine publishing business in order to concentrate on core operations (see
SMG To Sell Publishing And Online Business).
Analysts believe that a full break-up of the company could also be a possibility. SMG includes the Scottish and Grampian ITV franchises, as well as cinema advertising business Pearl & Dean.
According to Q2 2002 RAJAR data, total Virgin Radio, comprising Virgin FM London and Virgin Radio AM, saw its weekly reach decline by 13.3% year on year to 3.1 million.
