Wireless Group Sells Scot FM To Guardian Media For £25.5m
The Wireless Group this morning said that it is to sell Scot FM to the Guardian Media Group (GMG) £25.5 million in cash and loan notes. Scot FM Limited owns just one licence and broadcasts across the central belt of Scotland as Scot FM.
In the year to 31 December 2000, Scot FM Limited had unaudited pre-tax losses of £0.9 million on turnover of £1.9 million and had stated net liabilities of £3.7 million. In the last RAJAR survey the station’s weekly reach dropped by 14.7% year on year to 371,000; share of listening fell by 0.4% points to 4.8%.
Wireless Group says that it has been considering the disposal of a licence which does not form part of the group’s ‘core strategy’. However, Scot FM is one of its largest assets and one that the group had previously said it did not intend to sell. The sale is thought to have been instigated in an attempt to ease cash-flow problems – Wireless Group made a loss of £34.2 million last year (see Wireless Group Grows Turnover And Reduces Costs). This is partly because IRG itself is a loss-making business.
The Guardian has reported that both Chrysalis Radio and Scottish Radio Holdings (SRH) made bids for Scot FM, but were rejected. Analysts at ABN Amro say that Chrysalis would have required more time to complete the transaction and SRH may have hit regulatory obstacles.
GMG already owns the Cardiff-based Real Radio, which broadcasts a mix of music, speech, news, sport and community information to Wales. The group is also part of the MXR digital radio consortium.
Shares in Wireless Group were up 5p at 127½p by 10:00am today.
