GCap Rejects Global Radio Offer
January 7, 2008 at 5:41 AM (PT)
GCAP MEDIA PLC, the U.K's largest publicly traded radio company, rejected a 313 million-pound ($460 million) bid by GLOBAL RADIO HOLDINGS LTD. and said it will outline strategic plans "shortly," reports BLOOMBERG. The possible offer by GLOBAL RADIO at a price of 190 pence per share in cash "significantly undervalued the company," LONDON-based GCAP said in an e-mailed statement TODAY. GCAP rose as much as 53% in LONDON trading, the biggest gain since the company was formed by CAPITAL RADIO PLC's MAY 2005 purchase of GWR GROUP PLC.
GLOBAL RADIO, the owner of the U.K.'s HEART and GALAXY radio stations, said yesterday it approached GCAP MEDIA about a possible bid and was rejected. GLOBAL RADIO said TODAY the approach was conditional and on limited due diligence, adding it is currently ``considering its position.''
"The offer puts enormous pressure on the new GCAP chief to convince shareholders about the future prospects of the company," INVESTEC analyst STEVEN LIECHTI, who has a "hold" rating on the stock, said via telephone TODAY. "GCAP may need to unveil a really aggressive plan to boost profitability as shareholders will be tempted to take the current offer of 190 pence per share."