NEWS: MAJOR SHAREHOLDERS IN SCOTTISH RADIO HOLDINGS PLC REJECT EMAP PLC'S 374M TAKEOVER OFFER by GRANT GODDARD

www.grantgoddard.co.uk June 2005

Major shareholders in Scottish Radio Holdings plc [SRH] have supported the companys decision to reject EMAP plcs offer of 374m for the 72% of SRH that it does not already own. SRH chief executive David Goode and chairman Lord Gordon have completed a tour of the main SRH investors, who have supported the boards decision that EMAPs 10.40 per share offer would need to be more than 11 to succeed. One City insider said: "The SRH board have done a pretty extensive round of talks with their shareholders and it has reinforced their decision to reject the offer. The ball's still in EMAP's court, but if they want to do a deal it seems that they will have to come back with something more." Sources suggest that the two sides represented by Goode and EMAP chief executive Tom Moloney may be secretly working towards an agreement at a price between 11 and 11.50, an acknowledgement that SRHs radio assets are critical to EMAP maintaining radio market share against newly consolidated competitor GCap Media plc. If a deal does not go ahead, EMAP would be unlikely to achieve more than 8.80 per share were it to sell its existing stake of SRH on the stock market. Rumours persist that EMAP may decide to quit radio altogether if its intention to control SRH proves unsuccessful. Last week, it was reported that Americanborn former EMAP Radio chief executive Tim Schoonmaker is presently on holiday at a 'dude ranch' in the US Midwest with Gary Hughes, the former EMAP finance director who quit the company in April. Speculation circulates that the pair might be planning a bid for EMAPs radio holdings with the backing of private equity. However, critics argue that, under Schoonmaker, EMAPs local radio stations lost considerable market share to competitors, a setback that EMAP is now tackling through the re-organisation of its radio division. On a like-for-like basis, EMAPs local analogue stations have lost 24% of total hours listened during the last four years, with losses recorded at every station except 'Magic FM' London, which showed a modest 3% increase. The declines in hours listened were substantial at key metropolitan FM stations such as 'Radio Aire' Leeds (down 54%), 'Metro Radio' Newcastle (down 45%), 'Radio City' Liverpool (down 31%) and 'Key 103' Manchester (down 32%).

[First published in 'The Radio Magazine' as 'Game,Set And Match, As Emap Takes SRH', #689, 22 June 2005]

Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of experience in the broadcasting industry, having held senior management and consultancy roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at http://www.grantgoddard.co.uk

News: Major Shareholders In Scottish Radio Holdings plc Reject EMAP plc's 374m Takeover Offer 2005 Grant Goddard

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