Excerpt from a joint press release by the Bristol-based GWR radio group and the Capital Radio Group of London on 29 September:
The boards of Capital Radio and GWR announce that they have agreed the terms of an all-share merger, to create the UK’s leading commercial radio group.
The merged group will own one national and 55 local analogue radio stations, 93 digital radio stations and will reach approximately 18 million listeners representing 36 per cent. of the UK commercial radio audience.
Based on the latest published financial results for both companies, the merged group will have combined turnover of 243m pounds, combined EBITDA [earnings before interest, taxes, depreciation and amortization] of 53m pounds and combined PBT [rrofit before tax] of 40m pounds. The merger is conditional on regulatory approval.
DMGT [Daily Mail and General Trust] and the Directors of GWR who hold in aggregate approximately 35.1 per cent of GWR’s issued share capital have given undertakings to accept the merger offer, which are described in more detail in the full announcement. DMGT has confirmed that it is very supportive of the merger and that it is its current intention that, should the merger be implemented, it will remain a shareholder in the merged group for the foreseeable future.
Based on the current issued share capital of the two companies, Capital Radio shareholderswill hold 52 per cent and GWR shareholders will hold 48 per cent of the issued share capital of the merged group.
Based on closing prices as at 17 September 2004, the last trading day before the announcement that Capital Radio and GWR were in merger discussions, the merged group’s combined market capitalisation would have been approximately 711m pounds.
[passage omitted]
Commenting on today’s announcement, Ralph Bernard, Executive Chairman of GWR, said:
“This merger is a fantastic opportunity to create UK commercial radio’s champion of the digital age. The enlarged group will be in a strong position to drive the growth of commercial radio’s share of listening and total advertising by providing enhanced services to listeners and greater opportunities for advertisers. We expect this to deliver increased value to shareholders over time.”
Commenting on today’s announcement, David Mansfield, Chief Executive of Capital Radio, said:
“Today’s announcement creates a vibrant new radio business with a leading position in an attractive and growing sector. Capital and GWR share common strategies and values, and have complementary brands and geographic transmission areas in both the analogue and digital spectrum. In addition to the synergies that we have identified, we will concentrate our efforts on further value creation over time by combining the strongest qualities of both companies within the new group.”
(Source: GWR Group, Bristol and Capital Radio, London in English 29 Sep 04 via BBC Monitoring)
on Sep 29th, 2004 at 14:21
This is terrible news. GWR wants to help stimulate the growth of local radio? the only thing which is local on the Mix Network is the adverts, the on the hour news and other information updates. The rest is centralised, They don’t even allow there competitions during the day to be local. How is this dreadful way of running local radio going to improve things? at least Capital Radio have the majority share, but if their FM radio stations are going to become part of the mix network, then local radio is going to be replaced by localised radio. At least Emap have become less centralised.
on Sep 29th, 2004 at 14:51
Be interesting to see if the EMAP/SRH merger that has been much talked about now comes about….
on Sep 29th, 2004 at 14:53
Should really have said, “takeover” rather than “merger”, as they already own 28%.
on Sep 29th, 2004 at 15:33
Oh dear……..
on Sep 29th, 2004 at 15:59
Even the news on GWR stations is presented from regional centres and sent down to the individual stations so I’ve heard. The stations no longer even have their own receptions taking phone calls. All calls to local stations are now diverted to a national call centre.
on Sep 29th, 2004 at 19:07
I think its time to scrap the whole lot and start again as none of them are independent, or local, or even providing good radio programmes.
on Sep 29th, 2004 at 19:31
The FM stations in the Capital Radio Network are o.k. They’re local, they’re not so centralised and most of their programming is local output where as the Mix Network only produces 16 hours local programming a weekday and on Sundays, they only have 7 hours which is unacceptable. I think it’s about time that Offcom tightened their guidelines on Local radio banning stations from centralising their information output or interactive output, and making it a requirement for local stations to produce a minimum of 16 hours of local programming each weekday, 12 hours on weekends. I also think they should make it a requirement of local radio to provide good live local sports coverage too.
on Sep 29th, 2004 at 22:23
The whole original concept of independent local radio has been abandoned I think. A case of the authorities giving into coroporate pressure. There probably won’t be any commercial local stations in 10 years, they will all be national or regional networks.
on Sep 30th, 2004 at 15:16
The UK Community stations development will be interesting to watch, some of these stations, which have been around a while running on occasional RSL permits, sound so “fresh” compared to the branded networks and while the presentation isn’t always perfect there is a genuine enthusiasm which is sadly missing from mainstream radio these days.
on Oct 6th, 2004 at 19:41
Though it all started as ILR; Independent Local Radio, it’s not independent, it was never local and many would argue that it’s a monotonous jukebox rather than radio! Is this rubbish really what pirates of the last four decades, stood up and said “NO” for? What a tragedy….. ;o(