MR DENIS O'Brien's holding company, Communicorp, has sold its Swedish radio station Klassica Hits 106.7 for an undisclosed sum to the radio division of the Daily Mail group.
The deal is thought to be worth several million pounds to Communicorp which also owns Dublin's Classic Hits 98 FM Esat Telecom, a 40 per cent stake in the Esat Digifone consortium which has been awarded the GSM mobile phone licence and a number of European radio stations.
A Communicorp spokeswoman said the company had sold Klassica Hits as it had "decided to concentrate on its interests in eastern Europe".
Opposition TDs last week questioned whether Esat Digifone had adequate funds to proceed with its development plans for the new mobile phone network, but the Communicorp spokeswoman rejected any suggestion that the disposal was connected to raising funds for the Esat Digifone. "The financing for Esat Digifone is already in place," she said.
The Communicorp spokeswoman said that the first approach regarding a possible sale was made by the Daily Mail and General Trust group and that discussions between the two parties had been ongoing for several months before the deal was completed late last week.
DMG Radio, the Daily Mail subsidiary which bought the station, has interests in more than 40 British radio licences worth more than £45 million sterling. It was merely a coincidence that the sale was finalised as negotiations surrounding the granting of the new mobile phone licence were nearing their completion, the spokeswoman added.
She said that Communicorp's radio business was separate from its telephone operations and added that the sale of Klassica Hits was "not related" to the financing of Esat Digifone. "This is a different business completely and entirely and it doesn't cross over," she added.
Communicorp was awarded the licence to operate the Stockholm based station in October 1993 and Klassica Hits went on air the following year. Within four months of its launch it had become Stockholm's fourth (from 10) most popular commercial station and it has maintained that position to date. The station was making profits before its disposal.
The reason behind the sale, according to Communicorp, is a decision to concentrate on its radio interests in eastern Europe, where it already operates four radio stations.
The group has operated Kiss 98FM in Prague since 1992 and more recently started operating a national network of stations in the Czech Republic which include Radio Proton in Plzen, Radio Hady in Brno, and Radio Morava in Ostrava. The Communicorp spokeswoman said the group also expects to announce further acquisitions in the Czech Republic within the next few months.
Communicorp also holds a radio licence for the Hungarian capital Budapest, and is one of a number of applicants for a new licence to operate a station in Warsaw. The Polish government is expected to announce the winning applicant within a month, according to the Communicorp spokeswoman.
Mr O'Brien owns 65 per cent of the holding company, Communicorp, having sold a 35 per cent stake to the international venture capital fund, Advent, in October 1994 for $10 million (£6.25 million).
The sale to Advent valued the company at almost £18 million, but the winning of the second mobile phone licence by Esat Digifone in which Communicorp holds a 40 per cent stake would greatly have increased the company's value.
