O'Brien firm seeks to expand in eastern Europe

Mr Denis O'Brien's radio group, Communicorp, is in negotiations to purchase a large number of radio stations in eastern Europe, The Irish Times has learned.

It is understood Communicorp, which already owns several stations in the Czech Republic, is carrying out due diligence on up to 17 stations.

Communicorp is expected to pay about €11.6 million for the stations located in various countries, including Bulgaria, the Czech Republic, Estonia, Finland and Hungary.

Communicorp is planning to buy the stations from US company Metromedia International, based in North Carolina. It specialises in telecommunications, radio and television, especially in Russia and eastern Europe.

Metromedia is selling the stations because since early 2003 it has been disposing of non-core assets. The company has promised that after selling the stations to Communicorp it will set about restructuring its own balance sheet.

It is understood that several parties took a look at the 17 stations but Communicorp, because of its long experience in the Czech Republic, has decided to proceed with a deal and believes it can significantly expand the stations.

Several of Communicorp's leading executives have visited the stations in recent weeks, although the company has declined to comment on the purchase.

On its website, Mr Ernie Pyle, executive vice president and chief financial officer of Metromedia, says of the sale: "Although this sale is subject to confirmatory due diligence by Communicorp, we do not presently expect any surprises which would result in termination of the agreement.

"We also do not anticipate any significant adjustment to the purchase price."

Communicorp is one of the largest and most successful radio groups in the State. Through its subsidiary, Radio 2000, it owns stakes in NewsTalk and Spin FM in Dublin and East Coast Radio in Co Wicklow. It also owns 98FM in Dublin.

In the year ended December 2002 - the most recently lodged accounts - the company boasted turnover of €16.8 million, up from €15.2 million. However, it reported a pre-tax loss of €1.2 million.

The company was one of the first Western media groups to enter the Czech radio market some years ago. While its Czech stations contributed €6.3 million in turnover in the period, the majority (€10.4 million) came from operations in Ireland.

Mr O'Brien, who is now active in the telecommunications market in the Caribbean, remains heavily involved in his various radio interests.

Despite poor rating in its initial period of operation, Mr O'Brien pledged his support to NewsTalk, the Dublin talk station. He also has given his support to the station by signing up Eamon Dunphy as a breakfast presenter.