Share sale sparks SRH takeover talk

Talk of a takeover of both the Scottish Media Group and Scottish Radio Holdings is rife after SMG’s surprise decision to sell its 27.8 per cent stake in SRH for £90.5m, writes Hamish Mackay.

Shares in both companies rose as the market anticipated further consolidation in the media sector.

SMG sold out to magazine and radio group Emap for £60m less than it paid two years ago – reducing its debts to £155m.

Emap may now move for SRH.

Finance director Gary Hughes admitted: “We are very happy with the bit of business we did. We wouldn’t have taken the stake if we didn’t think it was a complementary asset.”

After expanding from its TV base, SMG’s Scottish media empire has been contracting since last year when it sold its stable of Glasgow newspaper titles, including The Herald, to USbased Gannett for £216m.

A bid for SMG’s television stations is expected from Granada, soon to merge with Carlton to create ITV plc.

Disney is expected to tangle with ITV plc in a bidding battle for SMG’s 25 per cent stake in GMTV.

GMTV is owned equally by SMG, Disney, Granada and Carlton. Each has pre-emptive rights over the shares, giving them priority in a sale.

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