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'News: The Wireless Group plc May Be Auctioned After Management Buyout Plan Fails' by Grant Goddard

'News: The Wireless Group plc May Be Auctioned After Management Buyout Plan Fails' by Grant Goddard

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Published by Grant Goddard
News story about the likely auction of UK commercial radio owner The Wireless Group plc following failure of a planned management buyout with venture capital, written by Grant Goddard in February 2005 for The Radio Magazine.
News story about the likely auction of UK commercial radio owner The Wireless Group plc following failure of a planned management buyout with venture capital, written by Grant Goddard in February 2005 for The Radio Magazine.

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Published by: Grant Goddard on Jun 18, 2012
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11/20/2013

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NEWS: THE WIRELESS GROUP PLC MAY BE AUCTIONED AFTER MANAGEMENT BUYOUT PLAN FAILS by GRANT GODDARD

www.grantgoddard.co.uk February 2005

UK commercial radio station owner The Wireless Group plc [TWG] could be auctioned, following the decision of its independent directors to instruct investment bank Goldman Sachs to issue a sale memorandum. The move follows the failure of TWG chief executive Kelvin MacKenzie’s bid to take the company private, after American financier Veronis Suhler Stevenson [VSS] withdrew its support. TWG subsequently issued a statement explaining that talks between the board and MacKenzie about the 90p per share bid were over: "Discussions regarding this proposal have now ceased, solely as a result of the cessation of discussions between Kelvin MacKenzie and his potential private equity backer." The board said that MacKenzie could continue discussions with alternative potential investors, but noted that it had received “expressions of interest” from other potential buyers, though no firm offers had yet been tabled. MacKenzie was reported to have told an adviser: "We fell out of bed because VSS doesn't understand the UK radio sector. VSS could not get its head around the necessary financial arrangements to incentivise the management.” MacKenzie presently owns 6% of TWG and was thought to have disagreed with VSS on his 'personal terms'. The possibility exists that he could now approach 3i or HG Capital, both of which also specialise in media bids. At the same time, existing radio groups and cross-media owners such as the Daily Mail & General Trust or Northern & Shell are being mentioned as possible bidders. Lord Ali had discussions last week with MacKenzie about the possibility of a merged sales operation that would sell two national commercial stations – 'TalkSport' and 'Virgin Radio' – with complementary audiences. Lord Ali’s own plan to buy Virgin Radio from Scottish Media Group is thought to be floundering on a lack of support from the latter’s main shareholders – ITV, fund manager Fidelity and F&C Asset Management.

[First published in 'The Radio Magazine' as 'Wireless Group Up For Auction?', #673, 2 March 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

News: The Wireless Group plc May Be Auctioned After Management Buyout Plan Fails ©2005 Grant Goddard

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