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Gmg Radio Set To Be Sold - Real Radio Likely To Become Heart

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Global Radio's £50m swoop on GMG Radio a 'done deal'

Guardian Media Group is expected to sell GMG Radio, the owner of Smooth Radio and Real Radio, within the next week as negotiations with Global Radio over an estimated £50m deal are believed to have entered advanced stages.

Several sources close to the deal have confided that the sale could be announced within the coming days, barring any last minute complications. One senior radio executive went further, and told Media Week the sale of GMG Radio to radio's largest player, Global Radio, was already a "done deal".

Other industry leaders tempered talk of a completed deal by saying they believed another bidder, likely to be funded by private equity, was also interested in acquiring GMG Radio.

Should a deal between Global Radio and GMG be agreed, it is likely to attract the attention of the competition authorities. Rival commercial radio operators have suggested they would challenge the move and the increased market dominance it would afford Stephen Miron-led Global Radio.

According to GMG’s annual report GMG Radio made revenues of £47.1m in the year to 3 April 2011, down 6.0% year on year, and made a pre-tax loss of £4.1m, down from a loss of £68.6m in the year to 28 March 2010 following impairment charges of £69.2m.

The estimated sale price of around £50m is less than half of the carrying value of GMG Radio in the 2011 report (£118.9m). However, when this year’s report is published GMG is likely to write down its value further.

In an email to staff yesterday GMG Radio chief executive Stuart Taylor did not confirm or deny a possible sale but said because GMG Radio is a strong and growing business, interest "both real and imagined" is not a surprise.

Although TalkSport-owner UTV Media has been involved in talks about a possible purchase of GMG Radio over the last year, it is not understood to be involved in live discussions at the current time.

It is understood that Bauer Media is not involved in the live negotiations, although its parent group chief executive and shareholder Yvonne Bauer has said Bauer would be interested in further radio acquisitions.

Spokespeople for GMG, Global Radio and Bauer Media declined to comment. A UTV spokeswoman said: "As a PLC we never comment on speculation."


If the deal does go through then all the real radio stations would most likely be rebranded to Heart

Real Radio North East - Heart North East

Real Radio Yorkshire - Heart Yorkshire

Real Radio Scotland - Heart Scotland

Real Radio (South Wales) - Heart South Wales

Real Radio (North West) - Heart North West

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GMG has been sold to Global Radio for around £70 million

Guardian Media Group has sold its radio business, which includes the Real Radio and Smooth Radio networks, to Global Radio for an estimated price of £70m.

GMG, which has built up the UK's third-largest radio group over the past 13 years, signed the deal with Global Radio after receiving a number of offers for the GMG Radio unit.

It is thought that the offer tabled by Global – the parent company of brands including Capital, Heart and Classic FM – was in the region of £50m and was by some distance the most attractive offer.

However it is understood that the price was pushed up to about £70m in a last-minute bidding war after Bauer Radio, the second-largest UK radio company owner of brands including Kiss and Magic, made an 11th hour play to snatch GMG Radio.

Global Radio may have to deal with competition issues in areas including Cardiff and parts of the midlands as a result of the deal.

Rivals including Talksport-owner UTV Media, which is understood to have submitted a bid, Absolute Radio and Bauer Radio, which owns Kiss and Magic, are expected to look at lodging complaints with the Competition Commission that Global Radio will have too much market dominance in certain regions.

When Global Radio took control of GCap in 2008 it was forced to sell off some stations in the midlands to Orion Media, headed by former Chrysalis Radio boss Phil Riley, to appease regulators.

However, another observer points out that it appears that competition regulators are starting to take a more benign view of local media ownership rules.


Real Radio, Smooth Radio and other brands will continue to stay as they are for several months whilst Office of Fair Trading and / or the CC (Competition Commission) conduct their review into the takeover.

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