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Times Group looking to sell UK radio unit

Times Group looking to sell UK radio unit
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First Published: Tue, Apr 05 2011. 12 27 AM IST
Updated: Tue, Apr 05 2011. 12 27 AM IST
Mumbai: Bennett, Coleman and Co. Ltd (BCCL), which acquired UK-based Virgin Radio Holdings Ltd in June 2008 for £53.2 million (Rs 382.5 crore today), is considering the sale of the radio company, according to two people with direct knowledge of the matter.
It has given Jefferies India Pvt. Ltd the mandate to sell the business, added the two, neither of whom wanted to be identified.
“We are in the process of conducting a review (of our various businesses)—as to where we stand. It’s too premature to talk about the likelihood of sale, etc. I wouldn’t want to comment any further,” said Ravi Dhariwal, chief executive of BCCL.
Virgin Radio was acquired by TIML Radio Ltd, a subsidiary of Times Infotainment Media Ltd (part of BCCL), from Scottish Media Group Plc. It was renamed Absolute Radio.
TIML Radio had then said that it would invest £15 million in the rebranding effort.
The radio station has an FM licence for London and a national AM licence with listeners in England, Scotland and Wales.
The radio company’s performance dipped in 2009, the latest year for which numbers are available. Mint couldn’t ascertain whether its performance improved or deteriorated in 2010.
For the calendar year 2009, TIML Radio registered a 60% rise in pre-tax loss to £4.3 million from £2.69 million. Revenue fell to £14.79 million from £21.99 million.
Listenership patterns are well established in Europe and Times may have found it difficult to increase its audience, said Jehil Thakkar, executive director and head of media and entertainment (gaming, film industry, broadcasting, print media) at audit and consulting firm KPMG India Pvt. Ltd.
“Unless they were trying to cater to a specific diaspora in Europe, which they weren’t, getting people to tune in is difficult,” he said.
While there is some consolidation in the radio business in the US, especially after the Cumulus Media Inc.-Citadel Broadcasting Corp. deal in March, the geography of Europe poses challenges, Thakkar said.
“The radio companies in Europe are country specific with local tastes and, hence, consolidation there becomes difficult,” he added.
Mediaweek reported on 5 October that Absolute Radio hoped to break even during 2011, quoting Donnach O’Driscoll, chief executive of the firm.
According to a report by ZenithOptimedia released on 6 December, in terms of ad spends globally, the radio market is expected to underperform, growing by 10% while the entire media market is expected to grow at the rate of 16%.
Its share will consequently drop to 7% in 2011 from 7.5% in 2009. In 2013, the share is expected to drop further to 6.8%.
“Media spends worldwide are falling; it’s only in India that they are increasing,” said an investment banker at a Mumbai-based investment bank.
This may make it difficult to find buyers for Absolute Radio and the owner may have to take a haircut on the valuation, he said.
HT Media Ltd, the publisher of Mint, also owns FM radio station Fever 104, which competes in some markets with Radio Mirchi, owned by BCCL subsidiary Entertainment Network India Ltd.
harini.s@livemint.com
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First Published: Tue, Apr 05 2011. 12 27 AM IST