Three parties interested in buying Guardian’s radio stations

By | Published on Wednesday 13 June 2012

GMG Radio

Three parties have made an offer to buy the Guardian Media Group’s radio business, GMG Radio, according to reports. The Guardian’s radio company operates the Real Radio and Smooth Radio networks.

It’s thought the UK’s biggest radio firm, Global, which owns Capital, Heart, Classic FM, Xfm and LBC among other stations, is likely to be a lead bidder, though rival UTV is also said to be interested. According to Media Guardian, an equity outfit may be the third bidder.

The Guardian Media Group hasn’t actually formally put its radio business up for sale, though there has been talk of it selling the division before. The media firm, ultimately reporting to the not for profit Scott Trust, is obligated by its constitution to pursue profitable media ventures to safeguard the future of the usually loss-making Guardian newspaper and website.

It’s thought GMG Radio could fetch up to £50 million, somewhat less than the £118.9 million value listed next to the business on GMG’s balance sheet, though probably a fair price for a company generating in the region of £4 million in profits a year. Global and UTV would hope to make the firm more profitable by reducing its costs through economies of scale.

If Global were to acquire GMG Radio the deal would likely be subject to an enquiry by the Competition Commission, and the company might be forced to sell off some of its new acquisition’s licences in some regions where Global already dominates. The company was forced to do something similar in the Midlands when it bought GCap in 2008.

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