Concert promoter Mr Denis Desmond, Riverdance promoters Ms Moya Doherty and Mr John McColgan and financier Mr Dermot Desmond will net a combined €40 million (£31.5 million) if the Broadcasting Commission of Ireland (BCI) approves Scottish Radio's (SRH's) purchase of the outstanding 76 per cent of independent radio station Today FM. Another €20 million will go to the venture capital arm of ICC, now owned by Bank of Scotland.
The founder-shareholders will make huge profits on their initial investment, repaying them for the substantial risks they took in starting and continuing the radio station through a very difficult early period.
Mr McColgan, Ms Doherty and Mr Denis Desmond will share €33 million for their 42 per cent stake, Mr Dermot Desmond will get about €6.5 million for his 8 per cent while ICC Venture Capital will receive more than €20 million for its 26 per cent interest. The terms of the deal value Today FM at almost €80 million.
SRH's proposal to go ahead with a full takeover of Today FM will inevitably focus speculation on Ulster Television's (UTV's) intentions towards Cork radio group County Media.
Earlier this year, the BCI first blocked UTV's £28.5 million takeover of County Media, but subsequently allowed it acquire a 60 per cent stake after getting assurances about board composition.
UTV indicated that if the BCI eased its ownership regulations, it would go ahead with buying out the remaining 40 per cent.
SRH, which has progressively built up its 24 per cent stake since March 1997 at a cost of just €3.6 million, first agreed terms for the buyout last August subject to the approval of the BCI.
Until mid-October, the BCI did not favour full-scale acquisition of national radio interests. But it said then that it would consider allowing 100 per cent ownership "where all the other criteria are met".
Industry sources said SRH was highly unlikely to have made yesterday's statement on the buyout unless it was pretty sure of getting BCI approval.
SRH chief executive Mr Richard Findlay said: "We haven't given the BCI any assurances because we don't yet know what assurances and comforts it will want.
"We will be meeting the commission shortly and will know then what is required," Mr Findlay added.
The acquisition is also subject to the approval of the Tβnaiste, Ms Mary Harney. Given that SRH has no other radio interests in the Republic - it does own Downtown Radio in Northern Ireland - this is unlikely to be withheld.
In the year to the end of February, Today FM had a turnover of £7.8 million with operating profits of £1.37 million and pre-tax profits of £1.13 million.
Extrapolating from SRH's half-year results released yesterday, Today FM had operating profits of £833,000 sterling (€509,879) in the half year, indicating that operating profits were actually higher than in the previous full year.
Advertising revenues for the seven months to the end of September were up 9 per cent on the same period last year.
The proposed acquisition will be a major move for SRH, and Today FM will become the second-largest radio station in its network of 10 stations in Britain and Ireland.
The net €63.2 million SRH has already spent and will spend on Today FM will make the Irish operation the company's biggest acquisition.
It will also reinforce SRH's position as a major Irish media group as the group's other interests include four regional newspaper titles - the Kilkenny People, the Tipperary Star, the Nationalist & Munster Advertiser and the Leitrim Observer.
