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Communicorp’s radio purchase involved five underbidders Back  
Communicorp’s acquisition of five radio stations from EMAP, including Today FM, FM104 and Highland Radio was notable in that it involved the sale of five separate businesses, and in that it saw a hectic and complex bidding process prior to the deal, involving a long list of final underbidders. The deal, valued at €200 million represented an attractive price for the vendor, but the acquirer, Communicorp, has subsequently also been able to demonstrate value, judging by prices achieved in the sale of parts of the package.
The Mid Market Corporate Finance Deal of the Year was the acquisition by Communicorp Group Ltd, the Irish based media group, of Emap plc’s Irish radio assets comprising Today FM, FM 104 and Highland Radio for a total consideration of €200 million, making it one of the largest ever media transactions in Ireland. Merrion Corporate Finance handled the sale (a competitive auction process) on behalf of Emap plc, advising it on all aspects of the transaction. The transaction resulted in Communicorp consolidating its position as Ireland’s largest independent radio group.

For Emap the sale represented a significant return on its original investment in the assets. The strength of the price achieved reflected both the quality of the assets sold and the domestic and international interest in the assets. The sale highlighted the continued attractiveness of cash generative Irish media assets.
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The strength of the acquirer, Communicorp Group, in the Irish radio (and in the Dublin market, in particular) required the Irish regulatory authorities to review the deal closely. The negotiation of clearance with the regulatory authorities which allowed Communicorp to complete the deal to buy the three radio stations, subject to divestiture obligations, was noteworthy.

Following the Irish Competition Authority review of the transaction, Communicorp Group Ltd subsequently sold FM 104 to UTV plc. The price achieved was in line with the overall valuation put on the package of €200 million, and the value achieved in the deal was also underpinned by the fact that two of the underbidders to the deal continued to keep on offer their bids for the assets in the event of Communicorp having to pull out of the deal if it failed to pull off approval of the deal by the Irish Competition Authority.
The sale process was conducted by Merrion Corporate Finance in a very aggressive timescale through a competitive tender process, with 8 selected bidders. Five out of the 6 selected bidders remained in the process until the last few days before the deal was signed. From a competition viewpoint this was the first time that the Competition Authority has approved a transaction subject to the purchaser finding an “up-front” buyer (for FM104). It also showed that the Competition Authority is not afraid to impose stringent remedies when approving transactions that give rise to potential competition concerns.

Timing from signing to closing the deal was dictated by the need to obtain regulatory approval from the BCI and the Competition Authority.

The deal has to be wrapped up in record time, and the legal documents were prepared following agreement on the final bid in 19 hours.

The main advisers were: (legal), on behalf of EMAP, William Fry’s Ken Casey, and John Handoll, and (legal) on behalf of Communicorp, LK Shields (Gerry Halpenny), and McCann Fitzgerald, Lovells & Allen & Overy. Merrion Capital’s principal negotiator (on behalf of the vendor, EMAP) was Cathal Friel.

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