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Update on proposed merger of Capital Radio plc and GWR Group plc

The Boards of Capital Radio plc (Capital Radio) and GWR Group plc (GWR) provided shareholders in both companies with an update on the proposed merger (the ?Merger?) of the two companies announced on 29 September 2004 and also on current trading for both Groups.

Merger Update

* Proposed name of GCap Media plc for the Merged Group.

GCap Media will bring together the best of both companies and create the UK?s leading commercial radio group. GCap Media will be in a stronger position to attract and retain the industry?s best talent, obtain a greater share of music industry content and will be able to compete more effectively with BBC Radio.

Integration planning is well underway with the senior management team confirmed.

* Formal documents relating to the Merger are being posted to Capital Radio and GWR Shareholders.

* The Merger is to be effected by way of a scheme of arrangement between GWR and its shareholders under section 425 of the Companies Act 1985.

* The Merged Group expects to maintain Capital Radio?s current dividend levels and will seek to grow its dividend cover over time.

* The Merged Group intends to adopt a 31 March year-end.

* The Merged Group intends to publish its maiden interim statement for the six months to 30 September 2005 in November 2005 and it is anticipated that its first set of audited results for the year to 31 March 2006 will be published in May 2006.

* Meetings of GWR Shareholders and Capital Radio Shareholders will be held on 15 April 2005 to approve the Merger and it is expected that the Court will be asked to sanction the Scheme on 6th May.

* The Merger is expected to be implemented on 9 May 2005.

* It is anticipated that dealings in New Capital Radio Shares will commence on 9 May 2005.

Summary Trading Updates

* Following the previously announced 4% decline in revenues from October to December 2004, Capital Radio revenues are expected to increase modestly in the January to March 2005 quarter, resulting in a 1% decrease for the six months to 31 March 2005 year on year.

* GWR expects UK revenues to be flat for the 12 months ending 31 March 2005 compared with the previous year. In the quarter ended 31 March 2005 like-for-like revenues are forecast to be down 1% year-on-year.

Commenting on this important stage in the merger process, Ralph Bernard, Executive Chairman of GWR said:

“We are close to completing the deal which will create the UK?s leading radio group. GCap Media will soon be seeking to compete head to head with the BBC for audiences. This is a pivotal time for commercial radio as advances in digital technology open up new opportunities. GCap Media will have greater scale and the financial resources to put it in a position to take full advantage.”

David Mansfield, Chief Executive of Capital Radio said:

“During the past few months the senior management teams of Capital Radio and GWR have been working hard developing our integration plans. Having now met many of our new colleagues from GWR, it is clear that the breadth of talent, drive and initiative of GCap Media?s people will be the foundation of our future success. We look forward to implementing our plans and launching the new business once shareholder and Court approval has been secured.”

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