Ulster Television (UTV) has agreed to pay £98.2 million (€144.78 million) to acquire the British radio company Wireless Group, writes Jamie Smyth, Technology Reporter

The deal, which has been speculated about for a month and which was finally concluded on Saturday, will give UTV a strong foothold in the British national radio market. The company already owns several radio stations in the Republic, including Q102 and Limerick's Live 95FM, and is expanding into Britain and Northern Ireland.

Wireless Group owns talk radio station TalkSport, which recently announced its all-time high weekly reach of 2.5 million listeners in the three months to March 31st, 2005. These audience figures put it ahead of Virgin Radio as the second-largest nationwide commercial station in Britain behind Classic FM.

UTV's offer for Wireless Group is pitched at 91p per share, representing a premium of about 10.3 per cent over Wireless Group's closing price of 82.5p just before UTV announced it was in takeover talks with the firm in April.

Patrick Cox, an independent non-executive director of Wireless Group, said the offer also included a share alternative for shareholders wanting to maintain exposure to the growing radio market in Britain.

Wireless Group shareholders can choose to be paid in UTV shares or a combination of UTV shares and cash, if they choose not to take the cash offer.

"We believe that the combination of Wireless and UTV will create a strong competitor in the UK media market, with a diversified portfolio in TV and radio and a platform for expansion in the new digital channel formats," said Mr Cox.

Shares in UTV, which is the Belfast-based owner of the ITV franchise in Northern Ireland, closed at 88p last Friday, the day before a deal was announced.

"We believe that this acquisition will offer exciting opportunities for the continued expansion of UTV's business by providing a cornerstone for a broader radio strategy in Great Britain," said UTV chief executive John McCann in a press statement.

UTV is already a major player in commercial radio in the Republic of Ireland, with stations in Dublin, Cork, Limerick, Drogheda and Dundalk. It confirmed its growing presence in the radio market in March by winning a licence for Belfast. It plans to call the station U-105 and launch it sometime later in 2005.

UTV also owns a stake in Juice 107.6 FM, a local radio station in Liverpool with a potential audience of 1.3 million listeners. It acquired the stake in September 2003 as part of a consortium that includes the firms Absolute Radio International and Eurocast.

Wireless Group was set to go public earlier this year in a management buyout orchestrated by its chief executive, Kelvin Mackenzie, who is best known as a former editor of the Sun newspaper. However, the deal fell apart when private equity firm Veronis Suhler Stevenson pulled out.

News Corp, which is controlled by Rupert Murdoch, and Liberty media, controlled by John Malone, together own almost 50 per cent of Wireless Group. - (Additional reporting, Reuters)