Britain's Capital Radio and GWR Group said on Wednesday they planned to merge in an all-share, nil-premium deal to create the dominant company in UK commercial radio.
The deal combines London's most popular commercial radio station, Capital 95.8 FM, with GWR's nation-wide Classic FM, and smaller local stations. Together they will have about 40 percent of the 600-million-pound per year UK radio advertising market.
Despite analyst support for the terms of the deal, GWR shares fell 9 percent amid disgruntlement by some investors that the deal was not a 50-50 split. Cautious trading statements also weighed on shares in both companies.
Capital Radio shareholders would hold 52 percent, and GWR shareholders 48 percent of the combined company, which would have a market capitalisation of about 691 million pounds ($1.34 billion) based on trading prices on Wednesday afternoon.
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