The Competition Authority has approved the €7 million takeover of Donegal's Highland Radio, but has attached several conditions to the deal.
The authority said the purchase by Scottish Radio Holdings (SRH) would not "substantially lessen competition in markets for good and services", but some conditions still needed to be met.
The main condition is that Highland shall end all forms of participation in Independent Radio Sales (IRS) within the next six months.
Independent Radio Sales (IRS) is the central sales and marketing operation for 16 of the Republic's commercial radio stations. The authority said it was important Highland was not centrally involved in IRS as this might reduce the amount of competition taking place.
Highland has been instructed to give up its shareholding in this body, to end any involvement in its management and to remove itself from the board. The authority said IRS could still sell airtime on behalf of Highland in future, but this must be done on an "arms length basis" and Highland cannot participate in the profits of IRS.
It is likely that Highland and SRH will meet the conditions as both parties are anxious for the sale to proceed.
The Minister for Enterprise, Trade and Employment, Micheál Martin, now has to examine the deal. If he makes no order within the next 10 days the deal can go through.
The beneficiaries of the deal, including several senior executives from Sigma Wirelsss, will be able to reap a substantial windfall once permission is granted.
The father of Irish golfer Paul McGinley is among the beneficiaries. Michael McGinley, a senior executive of telecoms group Sigma Wireless, is among seven shareholders set to share equally in the windfall.
The other shareholders who stand to gain are Charlie Collins, the station's chief executive; Shaun Doherty, a radio broadcaster based in Derry; Con Friel, an investment consultant; Tony Boyle, Sigma Wireless chief executive; Willie Patterson, a company director; and Patrick Keeney, a company director from Lifford, Co Donegal.
Highland Radio has been operating since 1990 and has a broadcasting licence until 2014. In the financial year to March 31st, 2005, it generated turnover of €2.1 million and operating profits of €275,000. At that date its net assets were €1.1 million.
SRH was itself recently acquired by British magazine publisher and radio group Emap. Emap has committed itself to retaining its Irish stations which include Today FM and FM 104.
Emap however decided to offload its newspaper interests to the UK regional publisher Johnson Press.
Since acquiring SRH, Emap has left the running of the Irish stations to local management.
