Setback for O'Brien as FM104 bid blocked

The rejection by broadcasting regulators of Denis O'Brien's proposed takeover of Dublin radio station FM104 is a setback for the billionaire businessman, who has agreed to pay €200 million for the Irish radio assets of British group Emap.

The Broadcasting Commission of Ireland (BCI) delivered a second blow to O'Brien yesterday by rejecting his bid for a multi-city radio licence for listeners over the age of 45, but it has approved his takeover of Emap's other Irish stations: Highland radio in Donegal and the national station Today FM, This is a big plus for O'Brien, as his prime target in the Emap portfolio was Today FM and its strong competitive position against RTÉ.

O'Brien already controls 98FM, FM104's biggest rival, so the deal was always going to test BCI's ownership rules. While that ruling on its own will not derail the overall deal, the Competition Authority is conducting a parallel examination of the Emap deal under separate antitrust legislation. It remains open to the Competition Authority to block the deal or an aspect of it - as has the BCI - but the final position will not become clear for some time. The authority must deliver a preliminary ruling by October 26th, by which stage it will decide whether to open a full investigation into the deal or clear it. It may seek agreement from O'Brien to sell off an asset to maintain competition in the market. But the BCI decision means part of its scrutiny is already moot. No matter what the authority says, Mr O'Brien will not be able to achieve outright dominance in Dublin by combining 98FM with FM104. Thus attention now centres on whether the competition body will approve his takeover of Today FM. This could prove very contentious in light of Mr O'Brien's ownership of NewsTalk, the only other national commercial station.

He is likely to make the case that Today FM's "big ticket" advertising category means it is not in direct competition with NewsTalk, which has a minority market share. However, it is not beyond the realm of possibility that the authority would ask Mr O'Brien to sell NewsTalk to gain control of Today FM. The authority's opinion cannot be predicted, although it is assumed that Mr O'Brien's greater interest in Today FM would see him put NewsTalk on the market if it came to that.