GMG Radio purchase Century FM
John Myers returns to the station he set up in 1994 with the purchase of the two Century stations in the Northeast and Northwest.
GCap Media have announced the disposal of the two Century stations this morning for sixty-million pounds. GMG is financing the acquisition price from its own cash resources and borrowing facilities.
This could mean a re-brand of both stations from Century FM to Real Radio, and gives GMG two regional stations in the Northwest, along with 100.4 Smooth FM.
The two Century stations broadcast across the North East and North West of England have a combined TSA of over 7 million adults. This acquisition gives GMG a total of seven regional FM stations across the UK, elevating it to the fourth largest radio group in the country.
The deal allows GCap Media plc to retain the right to sell the Century stations to National Advertising Agencies. Regional Agency Sales will also remain with GCap, apart from Century NE. Local sales teams will continue to manage their own direct airtime. Century North West attracts 751,000 adult listeners and 5.6 million listening hours each week and Century North East 533,000 adult listeners and 4.2 million hours*.
Carolyn McCall, Chief Executive, Guardian Media Group plc said:
"These are great assets and are a perfect match for our existing radio portfolio. The purchase supports our wider Group strategy of expanding our radio operations through licence applications and acquisitions together with diversifying our overall Group media portfolio.“
John Myers, Chief Executive, Guardian Media Group Radio added:
“These are two very good stations, with great people and in areas of the UK we know well. It gives us increased scale and consolidates our determination to be a major force in radio”.
GMG Radio now has five of the top 10 regional stations in the UK and two out of the top three in market share*. The addition of the two Century stations gives GMG the largest regional footprint in the UK.
For GCap, the disposal of the stations progresses the plan announced in November last year to focus on building a strong portfolio of national brands and heritage local stations. The proceeds of the sale will be used to reduce bank debt and pension scheme deficits. Net debt at 30 September 2006 was approximately £76 million.
In the coming months, the GCap will consider the positioning and strategic options for its portfolio and, in the spring, will be able to assess progress on its key strategic initiatives. As part of this process the Board will be considering the appropriate level of future dividend cover to allow for suitable investment in the business, particularly in the light of the reduction in Group operating profits following this disposal.
GCap Media Chief Executive Ralph Bernard commented:
“We have carefully considered the priorities for the business at this time and the objectives of our national and local radio portfolio. These disposals make strong commercial and strategic sense. This deal not only allows us significantly to reduce our debt levels but will also provide us with the financial flexibility to continue to invest in priority areas of the business.
“The negotiations with GMG have been conducted in an excellent spirit and both parties believe there are partnership opportunities for our respective businesses in the future.
”There has been substantial interest from potential listeners and advertisers in the launch of our new national jazz station which will go on air in December. In addition, the new national digital contemporary and classic hit music station to be formed by the merger of Capital Gold and Capital Life is anticipated to launch in the first half of next year.“