A proposed €30 million takeover of Dublin station FM 104 by Scottish Radio Holdings (SRH) will be presented to the board of the Broadcasting Commission of Ireland (BCI) this Friday.
The proposal, submitted last week by FM 104 managing director Mr Dermot Hanrahan, could lead to a major payout for the station's shareholders, among them aviation millionaire Mr Ulick McEvaddy and Mr Hanrahan.
The offer from Scottish Radio Holdings (SRH) - which owns Today FM - is the latest in a long line of bids for the station. In 1995 Virgin Radio almost bought one third of the station and last October UTV came close to completing a takeover deal.
Sunday newspapers speculated recently that several British companies had made bids for the station. However, in recent months listenership figures have been disappointing and interest among some buyers cooled. But, for SRH, it represents a chance to gain a significant foothold in the Dublin market.
The current BCI board meets for the final time on Friday. The main issue its members will have to consider is whether Capital Radio Productions (which owns FM 104) should be allowed sell, even though its licence was only renewed last year.
To prevent stations making a quick financial killing after wining a licence, the BCI operates a so-called "moratorium" which prevents stations selling for at least two years after a licence has been awarded.
Lawyers for SRH and FM 104 hope the BCI will be able to approve the deal on Friday. The lawyers are likely to argue that the moratorium was devised to stop stations selling out in the first few months after winning a licence and the rule should not apply to FM 104. "FM 104 has been on air since late 80s so the context is different," one source said over the weekend.
The members of the broadcasting commission may refer the matter to the new BCI board, which is expected to be appointed shortly by the Minister for Communications, Mr Ahern.
If the sale goes through, the biggest beneficiary will be Mr Ulick McEvaddy, who owns about 38 per cent of the equity. Based on a purchase price in excess of €30 million, he would make more than €11 million. Mr Hanrahan, with almost 11 per cent of the equity, would make more than €3 million. The music impresario Mr Maurice Cassidy has about 25 per cent of the equity and would make a paper profit of about €7.5 million. Several of the station's management have small shareholdings and stand to make reasonable sums if the sale proceeds.
A BCI spokeswoman would only say last night a proposal had been received and would be examined on Friday. According to the BCI's ownership and control policy statement: "The Commission will generally look unfavourably upon proposed changes in ownership structures within a two-year period after the granting of a licence. The Commission takes the view that such changes are likely to undermine the integrity of the licensing process itself and be unfair to unsuccessful applicants."
