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.
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)