ITV to acquire SMG's Scottish TV licences if Virgin sold off

by Sam Matthews, Brand Republic 21-Feb-05, 09:00

LONDON - Lord Alli's bid for Virgin Radio could have wider implications and, if successful, could open the way for ITV chief Charles Allen to buy Scottish Media Group's two Scottish ITV franchises at a bargain price.

ITV is keen for Scottish Media Group to sell off Virgin because it would allow the network to snap up the Scottish and Grampian ITV franchises without paying a premium. ITV currently owns the largest stake in SMG, standing at 17%.

Last week, media entrepreneur and Labour peer Lord Waheed Alli put in a £100m bid for SMG's Virgin Radio station, backed by 3i.

SMG said the business is not for sale, but its shareholders, including ITV and Fidelity, are likely to call on SMG to put the business on the market if the bid is high enough.

It is believed that Lord Alli could be a stalking horse, working in conjunction with ITV chief executive Charles Allen, to get SMG to sell Virgin. Once Virgin is sold, SMG, which sold off its newspaper business some time ago, would be ripe for breaking up.

In addition, reports over the weekend linked Tim Schoonmaker, former head of Emap Radio, with private equity group HG Capital. They are reported to be putting together a bid for Virgin Radio.

Schoonmaker denied the claims this morning, saying: "I'm not employed by anyone working on a radio takeover. I was surprised to see the reports."

Schoonmaker was chief executive of Emap Performance, which houses Kiss FM and Magic, and chairman of Emap Advertising. The New Yorker resigned from the company in 2003 after more than 20 years.

At the time, no reason was given for his decision to leave although it was widely speculated that he might have fallen out with chief executive Tom Maloney about ambitions to bid for the radio assets of SMG. It was understood that Maloney was unwilling to fund the deal.

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