Findlay cuts back €52m offer for five radio stations by 36%

IN A clear signal of the impact of the economic recession here, Scottish businessman Richard Findlay has trimmed 36 per cent off his original €52 million offer for five Irish commercial regional radio stations.

It is understood that Mr Findlay made his revised offer of €33.5 million on October 24th, just before the bank holiday weekend. His bid is believed to be fully funded and has the backing of AIB and its private clients.

The offer has been made to the owners of KCLR, Tipp FM, Mid-West, KFM and Ocean FM. These stations are believed to be "actively considering" the revised offer from Mr Findlay.

The new offer represents a multiple of about 6.5 times the stations' combined earnings before interest, tax, depreciation and amortisation, which last year totalled around €5 million.

It is not clear whether all of the stations will accept the offer, or whether Mr Findlay would be prepared to proceed if one or more of the stations were to reject his latest bid.

The sale process is being handled by Raglan Capital.

It is not clear whether any deadline has been set for acceptance of his offer. Mr Findlay completed extensive due diligence on the stations during the summer after his original bid was accepted.

Mr Findlay's original offer was made at the beginning of the summer, before the financial crises hammered banks across the world and before Ireland officially fell into recession.

His original bid is believed to have been supported by a UK private equity player, but this backing was withdrawn as the scale of the economic downturn emerged.

Mr Findlay then submitted a revised offer of €46 million, which was turned down by the stations.

Since then the economic outlook has deteriorated sharply and the Government has indicated that further harsh measures might be required for it to balance the nation's finances.

According to JNLR listenership figures released yesterday, Mid-West and Tipp FM are among the most successful stations outside Dublin and Cork.

Mid-West's 49 per cent reach between October 2007 and September 2008 made it the third-biggest rural station, while its market share was 55.8 per cent.

Tipp FM's market share was 46 per cent, down 2.3 percentage points, but still good enough to put it in the top five stations outside Dublin and Cork.

Any sale to Mr Findlay would be subject to approval from the Broadcasting Commission of Ireland, the Competition Authority and the Minister for Enterprise, Trade and Employment.