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SMG officially rejects UTV offer

SMG have released a statement today officially rejecting a merger offer from UTV. Under the terms of the proposal, SMG shareholders would receive only a 50 per cent equity interest in the combined entity.

SMG, the owners of Virgin Radio, decided to reject the Proposal as they considered it to be unacceptable having regard to the relative market values of SMG and UTV, SMG’s prospects and the value of its portfolio of assets.

At the same time, the Board of SMG explained its view on these factors to UTV and indicated its willingness to meet to discuss with the Board of UTV whether a potential merger on mutually acceptable terms would be possible.

In addition, on 22 August 2006, the Board of SMG received a revised merger proposal from UTV under which SMG shareholders would receive only a 52
per cent. equity interest in the combined entity.

The Board of SMG has examined the Revised Proposal in detail and having had further discussions with UTV and its advisers, the Board of SMG has decided to reject the Revised Proposal for the reasons outlined above. The Board of SMG
has reiterated its offer to meet with the Board of UTV to discuss a potential merger which addresses the factors previously explained to them; that offer has not been taken up by UTV.

This announcement is made without UTV’s consent. There can be no certainty that an offer will be made nor as to the terms on which any offer might be made.

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