London's Heart FM and Galaxy Radio owner Chrysalis has confirmed that it is conducting a strategic review of it's radio unit, which could result in a sale in preference to a demerger. Months of speculation surrounding tension between the company's institutional shareholders, regarding the synergies and value of the two parts of the company, have culminated in the statement made today that "the review will be wide ranging and will assess all options which can deliver maximum value to Chrysalis shareholders, including a potential demerger of the radio and music businesses."
Chrysalis is the third largest commercial operator in UK radio, and boasts a strong positon days after it was announced that London's Heart FM has the city's favourite breakfast show, overtaking Capital Radio. Chief Executive Richard Huntingford emphasised that "we very much believe that further industry consolidation is necessary so as to strengthen the commercial radio industry." The company is said to be open to options ranging from a joint venture to a sale of the unit as a whole, or station by station.
Analysts have largely ruled out Emap and GCap as potential bidders due to regulatory issues, although Emap could potentially be interested in part of the portfolio. The possible sale was estimated to fetch around £200m, and although the review is expected to take some months a number of private equity firms are said to be already circling.
