Paul Robinson considers the future for GMG’s Smooth and Real Radio if Global was to snap them up.

It has been an open secret for months that whilst not officially sporting a “For Sale” sign Guardian Media Group would dispose of its radio business at the right price.

The right price though will be merely a fraction of the value of the business two years ago and much less than it cost to acquire.

In the most recent financial report up to end of March 2012, GMG Radio was given a book value of £119m but a sale will probably only net £50m at best.

Insiders at GMG Radio suggest that a sale is already agreed. Staff are apparently being told that a transaction has been completed and it’s only a matter of days before the keys are handed over.

Global Radio, the UK’s largest radio group and home to the Heart, Capital, LBC, Classic and XFM brands, has been talking to GMG for a while.

But has been unable to complete until it found a buyer for the stations - that it will be obliged to shed in order to comply with media ownership restrictions.

The story goes that Bauer Radio, owner of stations including Kiss, Magic, Clyde and Key 103, couldn’t be persuaded to take on Global’s cast offs.

So what would Global do with GMG’s Smooth Radio and Real Radio?

The latter is a really well run chain of personality-led, classic local commercial stations. Real Radio Scotland and Real Radio Wales are highly popular in their respective markets.

The only problem with Real as a brand is that it doesn’t have scale, and isn’t in the majority of major UK cities and conurbations.

If Global were to take control, Real would likely be morphed into Heart where regulation allows and sold where it doesn’t.

Smooth Radio is a bit more complicated.

The management has acquired a strong DJ line-up of mostly ex-Radio 1 DJs and at reasonable cost so it would be wise to retain names such as Simon Bates, Mark Goodier, Lynn Parsons and David Jensen.

But Smooth as a brand stands for very little amongst non-listeners and the station has failed to deliver marketing to communicate a clear station proposition. The speech content on the station also is spotty in quality.

If Global is the successful buyer I can’t see them sticking with Smooth. More likely is that Gold, their oldies AM brand will assume Smooth’s FM distribution. If Global retain some of Smooth’s DJ’s they could finally deliver a competitive proposition for their classic hits format.

The other bidders are UTV and an undisclosed Private Equity fund. If the former get GMG Radio they would be more likely to keep Real and Smooth adding it to their existing mix of a national brand, TalkSport and local stations. To do so they would have to outbid Global which seems unlikely as they are not awash with cash, and £50m seems a big bite for them.

We don’t know who the third bidder is, but they could be the most exciting.

As a private equity fund they probably have a chief executive in mind but not a full management team, so it could be the “win win” outcome as they would be likely to retain the executives and the Real and Smooth brands.

Perhaps cut loose from GMG with a dynamic new shareholder and funder they could shift up a gear and become really significant consumer brands.

The only question is who could that chief executive be?

Obviously the fact that John Myers, the man who built up the group and has just resigned as head of the Radio Academy is now available and about to announce a new media project is totally coincidental.

Paul Robinson is president, international A Squared Elxsi Entertainment