Communicorp buy radio stations from Emap

Denis O'Brien’s Communicorp Group Limited has purchased the three Irish radio stations owned by Emap plc, it was announced today.

The takeover is subject to regulatory clearances from the Broadcasting Commission of Ireland (BCI), the Minister for Enterprise, Trade and Employment and the Competition Authority.

It is understood Communicorp beat bids from The Irish Times, TV3, UTV and Scottish media group New Wave to secure the deal.

Emap plc has notified the London Stock Exchange of the purchase today, July 16, 2007, for a cash consideration of €200m on a debt free, cash free basis.

Welcoming the conclusion of the purchase process, Lucy Gaffney, Chairman of Communicorp Group Ltd. Said: “Subject to the approval of the regulatory authorities, this deal is a very significant development for Irish commercial radio.

“This agreement to purchase the three Emap owned stations - Highland Radio in Donegal, FM104 in Dublin and the flagship national broadcaster Today FM, offers all three stations the security of a committed investor determined to develop commercial radio over the long term and of course, brings these great radio stations back into Irish ownership.”

For this purchase to be completed, the BCI will need to be satisfied that it complies with all of the Commission’s requirements and Communicorp are now looking for early discussions with the Executive and board of the BCI.

“We look forward to progressing the purchase process and particularly to working with Willie O’Reilly and his outstanding teams of management, broadcasters and production staff in Highland Radio, FM104 and Today FM,” said Lucy Gaffney.

Emap, which bought the business from Scottish Radio Holdings in 2005, said it would use the proceeds from the deal to reduce group borrowings.

Emap’s Irish radio unit generated operating profits of €10.3m on revenues of €31m in the year to March 31. It has gross assets of €81.3m.

The deal comes less than a week after the group sold it French exhibitions business Agor for €85m (€125.6m).

“The Republic of Ireland stations are great businesses, performing strongly with committed management and talent,” said chairman Alun Cathcart.

“This sale, and the recent sale of Agor, demonstrates our absolute commitment to accelerating our strategic aim of generating value for our shareholders.”

Emap is currently undergoing an overhaul of its business as it struggles to combat declining advertising revenues and falling print circulations. It is aiming to double digital revenues to £200m (€295m) by 2010.

The firm has also cut hundreds of jobs as part of plans to generate savings of £20m (€29.5m) by 2009.

Emap saw pre-tax profits fall 13% to £193m (€285m) in the year to March 31, amid “tough trading conditions”.

It is currently searching for a new chief executive to replace Tom Moloney, who stepped down in May.

Panmure Gordon analyst Alex DeGroote said the sale price exceeded expectations and showed there was an appetite for consumer media assets.

Shares in the group rose by almost 1%.