Only UTV left in race to buy O'Brien's FM104 station

Belfast-based broadcaster UTV is in exclusive talks with Denis O'Brien to buy Dublin local radio station FM104 for about €50 million. This follows the withdrawal late on Wednesday of a joint bid by Vienna Investments, which is backed by the former owners of FM104, Plainfield Asset Management from the United States and Liberty Global, owner of the NTL and Chorus cable TV operations.

UTV is now the only group left in the process to buy FM104 from an initial list of five bidders. This deal will give UTV its sixth commercial radio licence in the Republic and make it the second-biggest player in the independent sector behind Mr O'Brien's Communicorp group.

The publicly quoted broadcaster already owns LMFM in Louth, Q102 in Dublin, 96FM and 103FM in Cork, and Live 95FM in Limerick. The deal will be subject to the approval of both the Broadcasting Commission of Ireland (BCI) and the Competition Authority.

UTV is believed to have bid just more than €50 million, putting it several million euro ahead of the Vienna, Plainfield, Liberty consortium, which came together recently.

Vienna Investments and Liberty Global were thought to be pursuing separate bids.

TV3 dropped out of the running at an earlier stage of the sale process, along with UK private equity group Vitruvian.

Aimed at 15- to 35-year-olds, FM104 is the most listened to local radio station in Dublin.

It is expected to achieve earnings before interest, tax, depreciation and amortisation of €4.6 million in the current financial year.

This means UTV is paying a multiple of about 11 times FM104's projected earnings for the year to the end of March 2008. This represents one of the highest multiples paid to date for a radio station here.

Mr O'Brien is being forced by the BCI and the Competition Authority to sell the Dublin station as part of a deal agreed in July with UK media group Emap to buy FM104, Today FM and Highland Radio in Donegal.

Mr O'Brien's Communicorp radio group agreed to pay €200 million for the three stations, representing a multiple of 13.8 their combined earnings for fiscal 2008. If the same multiple were applied to the FM104 sale, the price tag would have been €63.5 million.

Mr O'Brien owns national stations Newstalk and Today FM, Dublin-based 98FM and Spin 103 and is a shareholder in a regional youth licence in the southwest. He is also a substantial shareholder in East Coast Radio in Wicklow.

This is the third time UTV has tried to buy FM104. It was blocked by regulators on competition grounds about six years ago, and lost out to Mr O'Brien earlier this year in the race to acquire the Emap stations.