UTV set for bid war over Wireless Group

Ulster Television could be facing into a bidding war with former Sun newspaper editor Kelvin MacKenzie after saying it was interested in buying British radio company the Wireless Group.

In a statement to the London and Dublin stock exchanges yesterday morning, UTV confirmed that it had entered into "exploratory discussions" with the Wireless Group in relation to a possible offer.

The company said the talks might or might not lead to a bid being made.

The Wireless Group, which owns popular British sports radio station, TalkSport, later confirmed that it had entered into exclusive negotiations with Ulster. The period of exclusivity is thought to have been set at a period of weeks rather than days.

Ulster is said to be mulling an offer of more than £100 million (€147 million) for the Wireless Group. The radio company's chief executive and chairman, Mr MacKenzie, is also said to be keen on mounting a bid.

Mr MacKenzie, who owns about 6.4 per cent of the Wireless Group, made an approach for the company in February but this failed after his backers pulled away. He is now said to be discussing a new bid with venture capital group, 3i.

"I've never hid my desire to launch a bid for the group and that remains undimmed," Mr MacKenzie said yesterday.

A successful takeover of the Wireless Group would represent a coup for Ulster, which has made no secret of its desire for expansion.

As well as giving the company control of TalkSport, a takeover would give Ulster a considerable presence in Britain's regional radio market if it decided to keep the Wireless Group's 16 local radio stations.

These stations have already attracted the attention of another potential bidder, the Local Radio Group, so could probably be sold separately if necessary.

Ulster is, however, thought to be keen to expand in British local radio, having recently been linked to an approach to UKRD, a local radio company based in the south of England.

News of the possible bid for the Wireless Group prompted some nervousness among Ulster's investors, with shares in the company falling 8p to 516.5p in London yesterday.

The Wireless Group reported a loss of £9.7 million for 2004 yesterday, compared to a loss of £11.2 million in 2003. - (Additional reporting, Reuters)