March 31, 2008 / 8:47 AM / 12 years ago

Global Radio to buy GCap

LONDON (Reuters) - Privately-owned Global Radio said on Monday it was to buy Britain’s largest commercial radio group, GCap Media GCAP.L, for an agreed 375 million pounds, to create a bigger rival for the BBC.

The deal will bring together Global’s Heart and Galaxy brands with GCap’s national Classic FM and network of commercial radio stations across Britain including Capital 95.8 FM and Xfm in London.

Global will pay 225 pence per share for GCap, giving the deal an enterprise value multiple of 17.8 times GCap’s 2007 reported earnings before interest, tax, depreciation and amortisation (EBITDA), “a premium to other recent transactions in the sector”.

Global chairman Charles Allen said in a statement GCap “is a very strong business with brands and assets that are highly complementary to those of the Global Radio Group”.

The two companies have been in talks regarding a possible recommended offer for much of the past month after Global raised its offer for GCap to 225 pence per share on March 4.

GCap, whose shares closed down 2.4 percent at 196.25 pence on Monday, had rejected offers at 190 pence and 202 pence from Global.

Earlier on Monday, GCap released a trading update, forecasting like-for-like annual revenue up 4 percent.

It said underlying revenue in the quarter to the end of March was also likely to be up 4 percent, while its statutory revenue for the year was set to be flat.

GCap also said it had been contacted by communications regulator Ofcom on Friday regarding its probe into alleged breaches of broadcasting rules in connection with a competition GCap ran last year. It said it was co-operating fully with this.

Reporting by Gavin Haycock and Dan Lalor; Editing by Paul Bolding

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below