The Connacht Tribune has agreed to buy out other shareholders in Galway Bay FM in a deal valuing the local radio station at €20 million.
The deal will unlock sizeable cash payouts for shareholders, including local businessman Gerry Rabbitte, the Catholic diocese of Galway , the GAA and the Western Health Board.
There has been speculation in recent months about the imminent sale of the station, with UTV seen as the main bidder up to this stage. However, the Connacht Tribune Ltd, which already held a 27 per cent stake in the station, has now agreed to acquire the remaining interests.
The Connacht Tribune Group has been a shareholder in Western Community Broadcasting Services Ltd, the company running Galway Bay FM, since its inception in 1988. It has grown its interest since then with a series of investments in the stations as it expanded its services.
The deal will see Oranmore businessman Gerry Rabbitte receive almost €6.1 million - a significant return for one of the station's founding investors and its largest single shareholder.
Catholic bishop Dr Martin Drennan will collect a €1.14 million windfall on behalf of the Catholic diocese of Galway, which has a 5.7 per cent holding, while the GAA will receive €800,000 in respect of its 4 per cent shareholding. This money is expected to go to help the GAA to pay off some of its €2 million debt on Galway's Pearse Stadium.
The Western Health Board's 5.5 per cent stake will realise 1.1 million. Other smaller shareholders include the Tribune group's rival, the Galway Advertiser.
"The Connacht Tribune is delighted to build stronger links with one of the most successful local radio stations in the country with in excess of 100,000 listeners every day. The station's success has been achieved by its dedicated and enthusiastic team of management and staff and there are no plans for changes to that winning operating structure," a spokesman for the board of the Connacht Tribune.
The Connacht Tribune is the Republic's largest regional newspaper with circulation of around 30,000 and a weekly readership of more than 130,000 people. As well as the Connacht Tribune, the company also publishes the Connacht Sentinel and the Galway City Tribune.
Kevin Kellett of Connolly Corporate Finance is acting for Galway Bay FM in the transaction and Ted Webb of IBI Corporate Finance represents the Connacht Tribune Ltd.
The station had been approached by UTV. However, there was some concern that any acquisition by the Belfast-based group, which is already the largest player in the Irish market in terms of the number of stations it owns, could breach rules laid down by the Broadcasting Commission of Ireland.
UTV already has a controlling interest in 15 per cent of the Irish radio market, owning Cork's 96 FM, Cork's 103 FM, Q102 FM and Limerick's 95 FM.
Local developers, led by Stephen Harris, also considered a bid last year but this came to nothing. The Connacht Tribune offer is considerably ahead of the €12-€13 million offered by Scottish Radio Holdings last year.
