Scottish Radio accepts Emap offer

The deal comes at a time of change in the UK radio industry

Scottish Radio Holdings (SRH) has agreed to be bought by media firm Emap, in the latest piece of takeover activity in the UK's radio industry.

Emap will pay 1,088 pence a share for the 73% of SRH it does not already own, valuing SRH at £391m ($712m).

"The transaction enables us to create the highest-quality independent local radio business," Emap said.

The deal brings together Emap stations such as Magic and Key 103 with SRH's stable which includes Radio Clyde.

The offer delivers significant value for our shareholders David Goode, SRH chief executive Check Emap's share price Check SRH's share price

Earlier this month, SRH had rejected a 1,040p-a-share offer from Emap. The new offer represents a 9% premium to SRH's closing share price on Monday.

Emap also said it would sell SRH's newspaper arm - Score Press - to Johnston Press for £155m.

Tuning in

SRH's radio operations consist of 22 wholly-owned and two partly-owned analogue radio stations, one digital service and six digital licences.

"The offer delivers significant value for our shareholders, enabling them to realise a premium in cash," said SRH chief executive David Goode.

MAJOR EMAP STATIONS Metro Radio Key 103 Magic Radio City Kerrang! Hallam FM

The UK radio sector has seen a number of takeover moves after a change in the law allowed companies to control a larger share of the radio market.

The UK's largest commercial radio group, GCap Media, was formed earlier this year following the merger of Capital Radio and GWR.

MAJOR SRH STATIONS Radio Clyde Radio Forth Wave 105 FM Vibe 101 Today FM Cool FM

Meanwhile, investment firm 3i has been trying to buy Virgin Radio from Scottish Media Group (SMG).

However, there was disappointing news for the commercial radio sector on Tuesday with both GCap and fellow radio company Chrysalis unveiling gloomy trading updates.

Advertising revenues at GCap fell 14% in May and it predicted difficult trading in the summer months.

Chrysalis Radio said revenues for the three months to 31 May showed "a decline of 14.5%", and indicated there may be continued difficulties in June, July and August.

Shares in GCap ended down 7% in Tuesday trading, while those of Chrysalis gave up 6.4%.