UTV yesterday reiterated its determination to become a major media player in the Republic when it acquired Lite FM, the Dublin radio station aimed at the over-35s, for €14 million.
The Belfast group's willingness to pay what is regarded as a high sum for a niche broadcaster that posted a €1.31 million operating loss last year, underscores its resolve to gain a foothold in the capital's lucrative but intensively competitive radio market.
An attempt last October to acquire Dublin's FM104 for €30 million was vetoed by the Broadcasting Commission of Ireland (BCI), prompting UTV, which already owns two regional stations, to open talks with Lite FM.
The BCI yesterday morning formally assented to the takeover, having approved it in principle at a meeting earlier this month.
Under the deal, UTV assumes liability for the station's debts of €1.3 million.
Lite FM put itself in the market place after its largest shareholder, CEA Radio Ireland Ltd, a division of UK venture capitalists CEA, indicated it wanted to sell its 27 per cent stake by the close of 2002.
UTV chief executive Mr John McCann said the purchase would "enhance the scope and presence" of the group's interests in the Republic.
Lite FM founder and chief executive Mr Martin Block will reap a €1.54 million windfall from the acquisition in what is believed to be a six-fold return on his 11 per cent investment.
Other beneficiaries include Mr Block's brother, Howard, a non-executive director whose 11 per cent stakehold will earn €1.54 million and Mr Scott Williams, station general manager and host of its mid- morning show, who will earn €1.4 million on a 10 per cent holding.
Mr Padraic White, company chairman and chairman of the Railway Procurement Agency and former head of IDA Ireland earns €280,000 on a 2 per cent holding.
Four shareholders gain €780,000 on 5.6 per cent holdings. They are: Mr Ronan Hardiman, a composer best known for his collaborations with dancer Michael Flatley, his agent Mr Peter Barden, Dublin businessman Mr Gerry Murphy, and Mr Robbie O'Reilly, owner of a post-production music studio in Dublin.
Mr Travis Baxter, a Scottish radio consultant, earns €280,000 on a 2 per cent stake, Ms Deirdre Kelly gains €630,000 on a 4.5 per cent holding and Mr Brian Stein makes €420,000 on 3 per cent.
Lite FM is understood to be near the break-even position following its launch in May 2000. In a highly competitive market, the latest Joint National Listenership Research shows the station has garnered a 12 per cent share of the adult market in Dublin.
Figures show it has gained listeners at the expense of the established independent stations in the city - 98FM and FM104.
Yesterday's deal values Lite FM at six times turnover - a figure that underlines the depth of UTV's determination to break into the Dublin radio market, said Mr Cathal Friel, analyst at Merrion Corporate Finance, which acted as advisers to Lite FM during the sale.
Last April the group spent €15.74 million on the Limerick-based radio station, Live95 FM. A year earlier, it completed the €36.2 million acquisition of the Cork radio group, County Media, with the purchase for €14.2 million of the outstanding 40 per cent that it did not already own.
In March, UTV also took a 50 per cent stake in Dublin media start-up Bocom Ltd, a company which supplies advertising, news and weather content via satellite to high-quality plasma screens in public areas.
When it blocked UTV's attempted purchase of FM104, the BCI cited a rule which effectively imposes a moratorium on the sale of stations subject to licence renewal - a caveat that does not apply to Lite FM.
