Global to appeal Competition Commission’s Real Smooth ruling

By | Published on Monday 17 June 2013

Real & Smooth Limited

Somewhat unsurprisingly, Global Radio is appealing the Competition Commission’s ruling that it must sell off more of the Real Smooth radio company than it is allowed to keep in order to avoid creating competition issues in the local advertising market in seven regions.

The Commission’s ruling on Global’s acquisition of what was the Guardian Media Group’s radio company was pretty much as bad as it could get for the radio giant, especially as it had taken on all the liabilities for the takeover and the resulting competition investigation (rather than sharing them with GMG), meaning it must take the hit alone.

As previously reported, the Commission’s decision means that Global cannot forge ahead with the expansion it had hoped, plus it has to sell licences in seven regions.

It seems very unlikely Global will be able to recoup anything like what it paid GMG for the Real Smooth licences, because its biggest competitor Bauer is likely ruled out as a bidder (because it too would fall foul of the Commission’s ruling regards further radio station consolidation), and other possible bidders don’t have such deep pockets.

Which is why there was always a high chance that Global would try to fight the ruling through the Competition Appeal Tribunal. Though the company has also hired the services of corporate finance house Lepe to begin sounding out possible buyers should it fail at Tribunal (or, even if it succeeds, some forced sales would likely remain).