Emap a better fit than SMG, says Scottish Radio

Media group Scottish Radio Holdings (SRH) yesterday reiterated its commitment to its Irish operations despite the swoop by British regional group Emap for a substantial stake in the company.

SRH owns independent national radio station Today FM and an extensive portfolio of regional newspapers on both sides of the Border.

These include the Longford Leader, the Leitrim Observer, the Kilkenny People and the Tipperary Star.

Emap, whose radio and print interests are concentrated more in England, acquired the 27.8 per cent of SRH owned by Scottish rival Scottish Media Group (SMG) on Friday for £90.5 million (€130.7 million).

The price was equal to 930p per SRH share, SMG said in a statement. The stock closed last night at 955p in London.

In a statement yesterday, SRH said it was "disappointed" that SMG had ignored its offer to place the 9,729,361 shares with institutions.

It added, however, that it "looked forward to a more constructive and mutually beneficial relationship with Emap" than it had enjoyed with SMG.

A spokesman for SRH said the change in ownership would not alter the group's strategy in Ireland.

"There will be no change in focus," he said. "Ireland forms a very important part of the group's diversification strategy and it has been a very successful area for the company."

Industry sources said that, while SRH would have preferred to see the shares dissipated among institutional investors, it would not be too unhappy with the arrival of Emap on the company register.

"The attention is probably unwelcome but Emap is a better fit than Scottish Media group for SRH," said one. "While SRH has a strong market in the Scotland, Northern Ireland and the Republic in radio and print media, Emap has strong brands in the radio especially in England."

Where SMG's interest in the company was always seen by SRH as predatory, Emap has said it views the stake as an "attractive strategic asset".

Emap finance director Mr Gary Hughes said the company believed there would be opportunities for consolidation within the UK radio sector, although it had no intention of making an offer for the rest of SRH's shares.

Under British takeover rules, Emap cannot make a move for control of SRH for a year, unless a third party bids for the group or acquires a stake of more than 20 per cent.

Scottish Media first took a stake in SRH in December 2000, acquiring 14.9 per cent of the company. The two companies have not enjoyed cordial relations and any hopes Scottish Media had of consolidating its position at SRH was undermined by financial constraints within the group.