UTV bids for commercial radio group

ULSTER Television has launched a €130 million bid for The Wireless Group, which runs Britain’s largest commercial talk radio station.

The offer, pitched at 91 pence per share, represents a premium of around 10.3% over Wireless’s closing price of 82.5p on April 18, the last dealing day prior to the date on which UTV announced it was in talks with the company.

Patrick Cox, an independent non-executive Wireless director, said the offer included a share alternative for shareholders wanting to maintain exposure to the growing British radio market.

“We believe that the combination of Wireless and UTV will create a strong competitor in the UK media market, with a diversified portfolio in TV and radio and a platform for expansion in the new digital channel formats,” Mr Cox said.

Ulster Television, the owner of the Northern Ireland ITV franchise and a number of radio stations in Dublin and Cork, has been expanding into the radio sector, including a new commercial radio licence in Belfast.

“We believe that this acquisition will offer exciting opportunities for the continued expansion of UTV’s business by providing a cornerstone for a broader radio strategy in Great Britain,” said UTV chief executive John McCann.

Shares in Ulster Television closed at 88p last Friday.

Wireless Group, which owns TalkSport radio, was set to go public earlier this year in a management buyout orchestrated by chief executive Kelvin MacKenzie, but the deal fell through when private equity firm Veronis Suhler Stevenson pulled out.

Mr MacKenzie is best known as the former editor of Rupert Murdoch’s market-leading tabloid The Sun. Murdoch’s News Corp and John Malone’s Liberty Media are both large Wireless Group shareholders, with a combined holding of just under 50%.

It is not known at this stage if Mr MacKenzie will try to find new backers and trump the UTV bid.

TalkSport’s audience hit an all-time high with a weekly reach of nearly 2.5 million listeners in the three months to March 31, according to data released this week by measurement group RAJAR. That puts it ahead of Virgin Radio as the second-largest nationwide commercial station behind Classic FM.

UTV has been looking for a major deal for some time. Last year it had approached Scottish Media Group about a takeover, which would have cost the firm more than €500m. SMG runs the ITV franchise in Scotland and also controls Virgin radio.

There are few acquisitions left in the Irish radio market as the majority of commercial stations have already changed hands.