Smg Share Discussion Threads

[johnroger] 29/4/2007 20:49

UTV lines up bid for Virgin or Emap stations
GUY DIXON
([e-mail])
MEDIA group UTV is lining up a possible £100m bid for either Virgin Radio or Emap's Irish radio stations following its failed merger with SMG.

Industry sources said John McCann, UTV's chief executive, believes both businesses would be a good fit with the Belfast group's radio division, but he can only afford one.

UTV, which owns the ITV franchise in Northern Ireland and Talksport radio, has been linked with bids for several radio stations. McCann said last month that he would be interested in Chrysalis's radio assets, which include London radio station Heart, if offered "at the right price".

Chrysalis is said to be looking for offers between £180m and £200m, but McCann is believed to want to spend less.

SMG said last month that it intended to float Virgin Radio in a bid to reduce its debt pile, but analysts believe it is more likely that the highly prized business, which has been valued at around £100m, will be bought before an initial public offering (IPO) occurs.

Emap put its Irish stations - Today FM, FM 104 and Highland Radio - up for sale in March following a strategic review. Analysts estimate the assets are worth up to £100m.

Patrick Yau, analyst at Bridgewell, said it was plausible that UTV would be interested in both assets, but he questioned how UTV would raise the £100m needed to buy either without going to the market, given the company's current net debt position.

He said: "I can see the logic of both deals. UTV already has a presence in the Irish market and doing a deal with Emap would give it a national Irish station as well as its regional stations. It could put them together and get cost and revenue benefits.

"The Virgin Radio and Talksport brands are relatively complementary. The national sales teams could be integrated and it would give UTV access to Virgin's digital radio stations."

One analyst said Sir Richard Branson could consider buying back Virgin Radio before the business was floated to add to his media empire.

The analyst said that a more ambitious strategy for Virgin could be to raise additional funds through the IPO, with a view to then acquiring other radio assets and building a bigger business that could survive as an independent.

A spokesman for UTV declined to comment on "market speculation".

[warala] 25/4/2007 15:43

ITV is improving from say 105p to now 115p.With all its problems with advertising revenue etc.yet the price is moving ahead.With SMG its the same sort of problems.You pays a higher price for certainty on any stock.Is there value to be had in SMG? Hanover seem to think so.UTV walked away from SMG.Can it be turned around and if so how long will it take.Patience i think will pay off.

[acornoptical] 25/4/2007 15:16

are we on the move again

[warala] 19/4/2007 15:39

Another 98,353 shares bought by UBS Global Asset Management = 5.01%

[acornoptical] 16/4/2007 10:39

good news ithink no ipo must be cheaper and quiker to exit this as long as the price is right

[doubleorquits] 15/4/2007 13:42

It seems to me that Richard Branson may well have a say in the future of Virgin Radio. I guess it might not even IPO if he gets his way. The following two articles suggest that he will play some part in its future, whether or not he gets it at his price is another thing. The following article is in today's Telegraph:


BUSINESS Branson lined up to retake Virgin Radio

JULIETTE GARSIDE

GCAP, Britain's largest radio group, is considering a bid for Virgin Radio which could involve a joint venture with the station's founder, Sir Richard Branson.

Virgin Radio was in effect put up for sale last week when its owner, Scottish Media Group, announced plans to float the company. GCap, which owns Capital Radio and Classic FM and recently hired Virgin Radio chief Fru Hazlitt, is understood to be considering making an offer for it.

Branson is also interested in regaining control of the service which he launched in 1993, but not at the £105m valuation put forward by SMG.

The preferred option would be to enter into a joint venture with any new owner. Branson harbours ambitions of creating an international radio business, with online broadcast as its backbone. He is keen to persuade any new Virgin Radio owner to pool the asset into Virgin Group's expanding foreign radio portfolio.

Last week, Branson signed a deal with French media giant Lagardère, which operates a Virgin Megastores business on the continent, to rebrand its national pop station Europe 2 as Virgin Radio. The deal is awaiting regulatory approval. With 2.8m listeners a day, Europe 2 is France's second largest contemporary music station with a signal reach that stretches into parts of Italy and Switzerland.

Virgin Group also owns analogue stations in Paris, South Africa, Italy, Thailand and Dubai.

The joint venture could provide a solution to the problem of falling advertising revenues which has dogged British radio stations over the past year by taking advantage of the online boom and gathering income from a range of world economies.

An industry source commented: "I think a sale of Virgin Radio is more likely than a float, but it would have to be to someone who understands what the future of radio could be. In the right hands, this asset could be very successful, but in the wrong hands it could continue to struggle."

The Virgin Radio network in Britain boasts 2.6m listeners a week. It has one of the largest online audiences in the country, with 28 per cent of its listening now over digital platforms such as the internet, digital television and digital radio.

Last week it emerged that Virgin Group had approached SMG two years ago about creating a global online radio business. Nothing came of the approach, but Branson is keen to revive the idea.

Buyers not willing to do business with Branson are unlikely to come forward, because Virgin Radio's licence to the brand runs out in 15 years, and Virgin Group has a right of veto over any change in ownership should the station be sold to a competing business.

Other potential buyers include private equity houses Apax and Permira, both of whom have considered approaches in the past 12 months.

Apax has a long history of involvement with Virgin Radio, having co-funded its launch. The station was eventually sold to Capital radio, but the deal was referred to the Monopolies and Mergers Commission. Before regulators announced their decision, Apax had backed a counter-offer from DJ Chris Evans, who acquired the station for £88m in 1997. He later sold Virgin Radio and his television production interests to SMG for £225m.

Meanwhile, buyers are lining up for the radio assets of Chrysalis Group, with television and radio owner UTV, Canadian media giant CanWest and private equity group Donaldson Lufkin & Jenrette preparing first round bids next week.

[cockneyrebel] 15/4/2007 11:23

Good article.

They might be looking at 2-3 years but Hanover don't hang about like that - you'll see positive change sooner imo, as with the Virgin float.

CR

[carl79] 12/4/2007 16:05

Although my holding here is among the lowest in my portfolio, it is always nice to see positive strategic notes...I sold most of my stock at the 80p mark - be good to get back there - I always had £1 pegged for SMG but only ever saw mid 90's

[johnroger] 12/4/2007 14:19

The House Of Hanover

By Padraig O'Hannelly | 12 April 2007
|
Turnarounds are risky, but the potential rewards are huge. The specialist skills of turnaround experts can add significant value to a company, and occasionally these skills are introduced by a new investor.

Whether described as 'activist shareholders' and 'turnaround specialists', Hanover Investors demonstrate this point beautifully. Targeting businesses where under-performance can be attributed to company-specific problems, rather than general sector weakness, the usual modus operandi includes:

taking a significant minority shareholding, but not taking the business private;joining the board, sometimes replacing existing directors;re-focusing the business on its core strengths, and disposing of non-core businesses;selling off under-utilised assets;introducing new capital where necessary.Sounds easy, doesn't it, but making such profound changes successfully is quite a challenge. So far, at least, Hanover has an enviable record. Hanover's ventures include:

4imprint (LSE: FOUR) -- promotional products. After Hanover bought in 2003, the company replaced its CEO, overhauled its US activities, and embarked on a restructuring program. Having doubled its money in just over a year, Hanover sold out, but 4imprint has continued to soar.

Elementis (LSE: ELM) -- speciality chemicals. Hanover bought in January 2005, and sold in mid-2006 at more than double the buy-price. Brought the core chromium business back to profit.

Cosalt (LSE: CSLT) -- diversified company including caravans and safety equipment. Having unsuccessfully attempted to sell off two businesses since Hanover joined in March 2006, Hanover's founder and managing partner joined the board in recent weeks.

Scapa (LSE: SCPA) -- tapes and cables. Hanover came on board in June of last year, and has so far sold off two businesses.

Renold (LSE: RNO) -- industrial chains. Also bought last summer, Hanover disposed of non-core businesses, and will fund the rest of the restructuring from sales of property. New factories have been opened in Poland and China.

Spirent (LSE: SPT) -- performance testing for telecommunications networks. Hanover affiliate Sherborne Investors bought a piece of this in August 2006; a boardroom battle ensued, which Sherborne won in December, and the CEO left last month. The results of a strategic review is expected in the coming weeks.

SMG (LSE: SMG) -- broadcast media, including Virgin Radio. Hanover bought in at the end of January, and within a month had scuppered plans for a merger with UTV, and orchestrated a shake-up of the board.

Plasmon (LSE: PLM) -- data storage. Hanover bought into Plasmon last month, at the request of the existing board.

To see how Hanover has managed to catch some falling knives without losing any fingers, just look at the share price performance in the year before Hanover got involved, and the subsequent growth:

Prev Yr
1 day
1 week
1 month
1 year
To date

4imprint
-52.6%
5.6%
-0.3%
25.1%
228.2%
1039.5%

Elementis
15.8%
9.4%
15.2%
19.6%
134.8%
172.7%

Cosalt
-24.0%
-0.6%
0.6%
3.0%
26.2%
41.4%

Scapa
4.1%
0.0%
0.0%
2.9%
28.1%

Renold
14.4%
0.8%
1.6%
11.3%
125.8%

Spirent
-19.2%
5.0%
16.3%
16.3%
56.3%

SMG
-30.3%
-1.6%
7.6%
8.4%
2.8%

Plasmon
-60.8%
36.6%
85.4%
70.7%
68.3%




While I wouldn't recommend blindly following any particular investor, it's certainly worthwhile keeping an eye on Hanover. It may have a lot on its plate at the moment, but considering its record I wouldn't bet against it

[cockneyrebel] 12/4/2007 09:55

yep, I know - I was saying I expect that to get sold sooner rather than later.

CR

[cambium] 12/4/2007 09:48

CR,

the Pearl & Dean cinema ad business is still up for sale,

[acornoptical] 12/4/2007 09:46

ipo of virgin will we get some shares or not as smg shareholders?

[bigbigdave] 12/4/2007 09:15

Mentioned on Five Live. Highlighted that SMG bought Virgin Radio at its height when Chris Evans was there and has been on the decline ever since.

[mkwng] 12/4/2007 08:27

price not up-side?
why?
good news, price not big up, then is downside.....

[cockneyrebel] 12/4/2007 08:07

Wakey wakey guys - IPO of Virgin Radio - must get SMG back in great health as a pure TV play - reckon there's other sell offs coming soon too like Pearl & Dean

CR

[warala] 12/4/2007 07:41

Strategic Update full of promise.Rob Woodward We will deliver for all our stakeholders.Looking good.

[cockneyrebel] 11/4/2007 17:07

looks like 63p is a nice support area imo. has bounced off that several times.

CR

[warala] 11/4/2007 16:15

Read the latest information about director change and note his comments.The price seems to be firming around these levels,but what do i know.Looking forward to see what the new directors say.Im holding on,fingers crossed.

[jdung] 11/4/2007 14:20

63P, how about report at 12.April.2007?
risk buy or waiting..., please comm and help...

[doubleorquits] 10/4/2007 10:45

It gives Hanover a lot more breathing space - until the end of next year nearly. Results this week will be the last of the bad news IMO with profits well down (to £11.5m). The Sunday Herald and Scotsman also sees Primesight being sold off but for less than was originally expected.

[carl79] 10/4/2007 10:01

What does this new banking facility mean for the company?

[gswredland] 30/3/2007 18:38

Exactly wynmck..can't see what people are getting their knickers in a twist about!

[wynmck] 30/3/2007 16:43

Indeed.They announced that results were put back to 12 April in the release 5 March and noted it was being done "to allow the new Board time to "review" future strategy