MEDIA giant EMAP yesterday employed the old-fashioned battering ram technique in a move to persuade shareholders of Scottish Radio Holdings to accept a takeover offer already rejected by SRH's board.
EMAP, which owns 28-per cent of SRH and has made no secret of the fact that it regards the company as an attractive strategic asset, revealed in a statement to the London Stock Exchange yesterday that it had offered 1040p a share for the 72-per cent of SRH it does not already own, valuing it at pounds-374.1m.
Most media industry observers agreed that EMAP is frustrated with the SRH board, and that the motive behind its statement was to agitate SRH's management into accepting the 1040p-a-share cash offer by stirring things up with shareholders.
Clydebank-based SRH, whose businesses include Radio Clyde and Forth, as well as almost 50 local newspapers, said last month that it would not accept an offer "unless it was in the interests of shareholders".
Some suggested SRH was waiting for an 1100p-a-share bid - which many observers estimate is closer to the value of all the company's parts when broken up. However, whether EMAP is prepared to raise its offer, a move which would seem to fly in the face of its own acquisition policy, remains an open question.
EMAP yesterday declined to comment beyond its statement, and David Goode, SRH's chief executive, did not return calls for comment.
Shares in SRH, which has previously rejected a tie-up with rival SMG, surged on the EMAP announcement, closing up 14-per cent, or 135p, at 1000p.
However, EMAP, whose own radio stations include Magic and Kiss, fell 2.5p to 802p.
EMAP, which has interests in advertising, magazines and radio, has been expected to make a bid for SRH since rivals Capital Radio and GWR agreed last year to merge into GCap Media, the UK's largest commercial radio group.
It expressed an interest in SRH on March 31 and made an indicative offer on April 22, but SRH's management "declined to entertain" it, EMAP said in its statement.
"The board of EMAP is disappointed by this reaction to this proposal which it believes fully values SRH, " EMAP added. "SRH's share price has not closed at or above 1040p since June 11, 2001. The board . . . continue to review the situation."
Nonetheless, in an apparent tit-for-tat war of stock exchange statements, SRH issued its own yesterday afternoon and said the offer "significantly undervalued" the company, adding "the board advises shareholders to take no action".
The major investment houses - including Legal & General Investment Management, which holds around 6-per cent of SRH, and Henderson Global, which has around 3-per cent - declined to comment on whether they were persuaded by the EMAP statement.
However, a spokesman for one investment house, who spoke on condition of anonymity, said:
"We have no issue with the fact we, or other shareholders, weren't asked about the EMAP bid. It's not that unusual for a company to rebuff the first offer by itself.
"Nor is it unusual for a suitor to try to agitate the management into action by seeking support for an acquisition straight from investors."
However, when asked if he had been persuaded into pressuring SRH's management to accept EMAP's bid, he added:
"pounds-10.40 a share is a pretty decent offer, and it's worth noting that EMAP is the only bidder on the market. But as to whether we intend to put pressure on SRH to accept the offer, I'm not going to go there."
Nonetheless, EMAP also kept its options open and warned it may pursue a further unsolicited bid for SRH - but at a lower price.
Meanwhile, yesterday's furore brought political reaction from a number of corners.
Jim Mather, the SNP's enterprise spokesman, said: "When headquarters move away, so too do profits and favourable investment decisions, to the general detriment of the Scottish economy."
However, Jim Wallace, deputy first minister, said: "This is a matter for SRH and its shareholders."
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