Private equity group HG Capital will make a bid for Virgin Radio if SMG is forced to auction the station to the highest bidder.
Private equity group HG Capital will make a bid for Virgin Radio if SMG is forced to auction the station to the highest bidder.

The group confirmed that it had been examining Virgin Radio for over a year and would attempt to buy the broadcaster if it were put up for auction.

Andrew Flanagan, SMG's chief executive, could decide to auction the business if he succumbs to shareholder pressure following interest in the station from Lord Waheed Alli.

Lord Alli, who is being backed by private equity group 3i, has twice had a£100m offer for the station turned down. But he has written to the top 10 shareholders, which include Fidelity and ITV, and will look to meet them this week in an attempt to push for a sale.

Sunday newspaper reports suggested Tim Schoonmaker, the former chief executive of Emap's radio division, had been hired by HG Capital to advise on a possible bid, but he has denied this.

Nick Martin, head of the media team at HG Capital, said: 'We have been interested in Virgin Radio for over a year and if SMG put it on the market, we would want to be involved in the sale process.

'But it is not fair to say we would be working on a competitive bid to 3i. For now, we are standing on the sidelines, watching the game.'

SMG bought Virgin for£225m in 2000, as part of its acquisition of Chris Evans' company - Ginger Media - but the broadcaster has since been written down in value to£160m.

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