Findlay bid for radio stations wobbles
The sale of five local radio stations to Richard Findlay, the former head of media group Scottish Radio Holdings, has hit a speed wobble as a major backer of the deal threatened to pull out.
It is understood that the original €52m price tag for the stations -- including Ocean FM in Sligo and Donegal; KCLR in Kilkenny and Carlow; Tipp FM in Tipperary; KFM in Kildare; and Mid West Radio in Mayo -- has been haggled down to between €45m and €50m.
Mr Findlay's bid is being backed by debt from AIB as well as equity from the lender's private clients.
It is believed a small UK private equity firm, which was lined up to provide between 20pc and 25pc of the equity, has now signalled it would walk away from the deal unless the price comes down further.
The radio stations were expecting a firm offer to be on the table at this stage, after the initial 90-day period for exclusive due diligence and negotiations ran out almost two weeks ago. This has been extended.
While some of the stations believe that the chance of a deal has passed, it is understood the bidding consortium is now in talks to plug any equity gap left by the UK private equity house.
There were suggestions yesterday that a number of large potential investors who had previously expressed an interest in the deal were back in the fray.
The stations are being advised by Dublin-based corporate finance firm Raglan Capital and corporate law firm Maples & Cadler.
The law firm was told to hold off on legal work until there was clarification on whether the deal would actually go ahead, sources said.
Solicitors A&L Goodbody has been working for AIB and Mr Findlay, who has also committed equity to the transaction.
The private equity firm is looking for a lower earnings multiple for the deal in the current climate.
Ireland was officially declared yesterday to have fallen into recession, with the economy contracting by 1pc in the first six months of the year.
However, turnover at the five stations is holding up well. Sales across the five are believed to be up between 15pc-30pc, year to date, compared with last year.
Any transaction would come hot on the heels of a flurry of dealmaking in the sector in recent years, including the €200m paid earlier this year by Communicorp for Today FM, FM104 and Highland Radio in Donegal. Both FM104 and Highland Radio were sold on.