The board of the Scottish Media Group (SMG) has confirmed that it has acquired 4.9 million shares, or a 14.9% stake, in Scottish Radio Holdings (SRH) this morning. SMG’s broker is said to be acquiring further shares in the market, but there is no intention at present of making an offer for SRH in its entirety.
The deal comes as the industry awaits publication of the Communications White Paper, expected next week. It is thought that the reforms included in the paper will hold particular benefit for the radio industry, with a relaxation of ownership restrictions allowing more consolidation.
A statement issued by SMG the company said that it intended to be a “leading player in any consolidation of UK media”, and that it believed that this investment “positions it well until the implications of new legislation are clear.”
Both companies have interests including radio, newspapers and outdoor advertising. Andrew Flanagan, chief executive of SMG, said, “This is a good opportunity for SMG to secure a stake in a company that’s a close match, geographically and operationally. SRH fits well with SMG’s strategy of investing in fast-growing media, in particular, radio and outdoor advertising.”
The deal has so far prompted a positive response from the market. At 11.15am shares in SRH had jumped nearly 20% on yesterday’s closing price, adding £2.35 to reach £14.42½, while SMG had increased by 13p to £2.55, an increase of 5%.
