Acquisition

RNS Number:2285S
Capital Radio PLC
19 November 2003


                                                      Wednesday 19 November 2003

                  Capital Radio plc agrees to acquire Choice FM
        through purchase of remaining 81% of Tainside Limited ("Choice")
                                        
Capital Radio plc ("Capital") today announced that it will enhance its portfolio
of London stations by acquiring London's Choice FM radio stations, with effect
from January 2004. The consideration will be satisfied by the issue of
approximately 2.5 million Capital shares valued at yesterday's closing share
price at approximately #11.7 million. This consideration would value the whole
of Choice at approximately #15 million.

Choice owns and operates the two Choice FM radio licences, broadcasting urban
contemporary music to a potential audience of 5.8 million adults in London.
96.9FM has been broadcasting to South London since 1990 and 107.1FM began
broadcasting to North London in 2000. In the most recent RAJAR figures for the
quarter to September 2003, Choice had 415,000 adult listeners in London, of
which 312,000 are aged 15-34. Choice also currently operates a network of 5
digital radio licences covering London, the North West, Yorkshire, North East
and the Severn Estuary and has also recently been offered an additional service
across the West Midlands, giving an aggregate potential audience reach of 25.8
million.

Capital acquired a 19% stake in Choice for #3.3million on 25 October 2001 and
entered into a put and call option under which Capital could acquire the
remaining 81% of Choice between September 2004 and September 2006. Capital has
now agreed with the Choice shareholders to accelerate the exercise of the put
and call option and to acquire the remaining 81% equity, with completion
expected in January 2004.

The consideration for the remaining 81% stake will be payable in Capital shares
and the amount will be determined in accordance with an agreed formula based on
the achievement of audience targets and a net current liabilities adjustment at
completion, estimated at approximately #1 million. The net consideration will be
paid in Capital shares at a pre-fixed notional conversion price of #6.355 per
share, resulting in approximately 2.5 million Capital shares being issued at
completion. Based on yesterday's share price of #4.675 per share, this would
imply a valuation for the remaining 81% equity in Choice of approximately #11.7
million.

If the RAJAR figures for the quarter to December 2003 result in the full
audience targets being met, additional consideration of up to a maximum #1.95
million will become payable, to be satisfied in Capital shares at the same
notional conversion price of #6.355 a share. The maximum price will become
payable if either its adult audience grows to 905,000 (from the original
277,000) or its 15-34 audience grows to 348,000 (from the original 170,000) in
the quarter to December 2003.

Unaudited figures for the twelve months to September 2003 show Choice had
revenue of approximately #1.8 million, made an operating loss from analogue
radio activities of approximately #0.3 million and invested approximately
#0.5million in its digital activities. At 30 September 2003, Choice had
unaudited net liabilities of approximately #0.3 million.

David Mansfield, Chief Executive of Capital Radio, commented:

"Choice is an excellent investment for Capital and one which complements our
existing portfolio of stations in London. We believe that Choice has significant
opportunities under its existing formats to grow its audience across London and
the UK. We already sell advertising on Choice and will now see increased
benefits of bringing it fully into the Capital family of stations."

Patrick Berry, who will remain as non executive Chairman of Choice commented:

"Choice FM have championed Hip Hop and R&B music for the last thirteen years
and from small beginnings we have developed a radio company that with the
digital radio platform will give us a coverage area of more than 25 million
people across the UK. The sale to Capital Radio Group will put the brand in safe
hands that will both protect the uniqueness of our programmes whilst at the same
time fully develop the potential of what the original shareholders and staff
have built."

Ends

Enquiries:
Capital Radio plc
David Mansfield         Chief Executive             020 7766 6240
Peter Harris            Finance Director            020 7766 6257
Jane Wilson             Director of Communications  020 7766 6863

Finsbury Group (press enquiries)
Rupert Younger                                      020 7251 3801
James Leviton







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