UTV is carrying out due diligence on Drogheda-based LMFM and is preparing to table a formal bid of between €9 and €10 million for the station, it has emerged.
UTV said its long-standing policy was not to comment on market speculation, but the two stations may be able to submit a change of ownership application to the board of the Broadcasting Commission of Ireland (BCI) next month.
LMFM, which is owned by a large number of local shareholders, has played down reports of a sale in recent months, but it is understood negotiations with UTV have now reached an advanced stage. The station's franchise area covers counties Louth and Meath.
A bid was also submitted in recent months by Scottish Radio Holdings (SRH), but sources said there was a "significant" difference between the SRH and UTV bids. "The serious talks are now with UTV, but obviously SRH remains in the background," said one source yesterday.
Accounts for LMFM have recently been lodged in the Companies Office. These show the company that owns LMFM, Independent Broadcasting Corporation Ltd, reporting accummulated profits of €389,153 for the year to August 31st, 2003, down slightly from the year before. The company's net assets were valued at €453,515.
The majority of shares in the company are held by a firm called Kalacastle Ltd. The shareholders of Kalacastle are mainly local businesspeople. The station's chief executive, Mr Michael Crawley, is also a shareholder in Kalacastle.
LMFM is the largest local radio station outside Dublin and Cork. It broadcasts to a population in excess of 300,000 adults. It operates two distinctive radio services, targeting the 25-plus age group during daytime broadcasting while focusing on the 15-30 age group from 9 p.m. onwards.
The main Dublin stations can also be picked up in LMFM's franchise area. While these stations cannot take advertising from the north-east region, their presence in the area poses a challenge for the station.
One of the main sticking points at this stage is whether UTV will also pay for the station's property at Rathmullen Road, Drogheda.
UTV already owns several media businesses in the Republic, including Dublin station Q102, Limerick's Live 95 FM and Cork's 96 FM and 103 FM. It also has a significant stake in the advertising business Bocom International.
