News story about the rejection by major shareholders in UK commercial radio owner Scottish Radio Holdings plc of a takeover offer by EMAP plc of £374m, written by Grant Goddard in June 2005 for The Radio Magazine.

1. NEWS: MAJOR SHAREHOLDERS
IN SCOTTISH RADIO HOLDINGS
PLC REJECT EMAP PLC'S £374M
TAKEOVER OFFER
by
GRANT GODDARD
www.grantgoddard.co.uk
June 2005

2. News: Major Shareholders In Scottish Radio Holdings plc Reject EMAP plc's £374m Takeover Offer Page 2
©2005 Grant Goddard
Major shareholders in Scottish Radio Holdings plc [SRH] have supported the
company’s decision to reject EMAP plc’s offer of £374m for the 72% of SRH
that it does not already own. SRH chief executive David Goode and chairman
Lord Gordon have completed a tour of the main SRH investors, who have
supported the board’s decision that EMAP’s £10.40 per share offer would need
to be more than £11 to succeed. One City insider said: "The SRH board have
done a pretty extensive round of talks with their shareholders and it has
reinforced their decision to reject the offer. The ball's still in EMAP's court, but
if they want to do a deal it seems that they will have to come back with
something more."
Sources suggest that the two sides – represented by Goode and EMAP chief
executive Tom Moloney – may be secretly working towards an agreement at a
price between £11 and £11.50, an acknowledgement that SRH’s radio assets
are critical to EMAP maintaining radio market share against newly
consolidated competitor GCap Media plc. If a deal does not go ahead, EMAP
would be unlikely to achieve more than £8.80 per share were it to sell its
existing stake of SRH on the stock market.
Rumours persist that EMAP may decide to quit radio altogether if its intention
to control SRH proves unsuccessful. Last week, it was reported that American-
born former EMAP Radio chief executive Tim Schoonmaker is presently on
holiday at a 'dude ranch' in the US Midwest with Gary Hughes, the former
EMAP finance director who quit the company in April. Speculation circulates
that the pair might be planning a bid for EMAP’s radio holdings with the
backing of private equity. However, critics argue that, under Schoonmaker,
EMAP’s local radio stations lost considerable market share to competitors, a
setback that EMAP is now tackling through the re-organisation of its radio
division. On a like-for-like basis, EMAP’s local analogue stations have lost 24%
of total hours listened during the last four years, with losses recorded at every
station except 'Magic FM' London, which showed a modest 3% increase. The
declines in hours listened were substantial at key metropolitan FM stations
such as 'Radio Aire' Leeds (down 54%), 'Metro Radio' Newcastle (down 45%),
'Radio City' Liverpool (down 31%) and 'Key 103' Manchester (down 32%).
[First published in 'The Radio Magazine' as 'Game,Set And Match, As Emap Takes SRH', #689, 22 June 2005]
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk