Recommended mandatory cash offer for Essex Radio plc

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Wednesday 21 January 1998

Daily Mail and General Investments plc ( DMGI), a wholly-owned subsidiary of Daily Mail and General Trust plc ( DMGT), announces today a recommended mandatory cash offer (the Offer) for the issued share capital, not already owned by the DMGT group, of Essex Radio plc (Essex Radio).

On 30th September, 1997, DMG Radio Limited (DMG Radio) entered into a contract to acquire a total of 135,766 Essex Radio shares, representing 13.8% of Essex Radio, conditional, inter alia, on confirmation from the Radio Authority that control of Essex Radio by the DMGT group could not be expected to operate against the public interest. Prior to this, the DMGT group owned 266,985 Essex Radio shares, representing 27.2% of Essex Radio.

On 20th January, 1998, the Radio Authority confirmed to DMG Radio that it was satisfied as to the above condition and, as a result, the acquisition of the 13.8% interest was completed. Consequently, the DMGT group now owns an aggregate of 402,751 Essex Radio shares, representing 41.0% of Essex Radio, and is, therefore, required under the City Code to make a mandatory cash offer for the outstanding issued ordinary share capital of Essex Radio.

Schroders, on behalf of DMGI, is making a mandatory cash offer to acquire all of the Essex Radio shares not already owned by the DMGT group. The Offer values each Essex Radio share at £21.27 and Essex Radio s entire issued ordinary share capital at approximately £20.9 million. The Offer has been recommended by all the directors of Essex Radio other than Mr Cox, who, as a director of DMGI, is unable to participate in the Essex Radio board's consideration of the Offer.

Those Essex Radio directors who are shareholders have given irrevocable undertakings to accept the Offer in respect of their entire interests of Essex Radio shares, amounting, in aggregate, to 13,333 Essex Radio shares, representing approximately 1.3% of Essex Radio's issued share capital. DMGI has also received an irrevocable undertaking to accept the Offer from Radiotrust plc in respect of its entire shareholding in Essex Radio, amounting to 100,039 shares, representing approximately 10.2% of Essex Radio's issued share capital. As a result of the above, the DMGT group now owns or has received undertakings to accept the Offer in respect of 52.5% of Essex Radio's issued share capital. Schroders is satisfied that DMGI has the funds available to satisfy full acceptance of the Offer.

The Offer is conditional upon valid acceptances being received (and not, where permitted, withdrawn) by not later than 3.00 p.m. on Wednesday, February 11, 1998, the first closing date of the Offer (or, such later time(s) and/or date(s) as DMGI may, subject to the rules of the City Code, decide), in respect of such number of Essex Radio shares which, when aggregated with the Essex Radio shares acquired or agreed to be acquired during or before the Offer, carry in aggregate more than 50% of the voting rights normally exercisable at general meetings of Essex Radio, including, for this purpose (to the extent, if any, required by the Panel) any such voting rights attaching to any Essex Radio shares which are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise and, for this purpose
(i) the expression Essex Radio Shares to which the Offer relates shall be construed in accordance with section 428 and 430F of the Companies Act 1985 and
(ii) shares which have been unconditionally allotted shall be deemed to carry the voting rights which they will carry upon issue.

The Offer will lapse if the proposed acquisition of Essex Radio by DMGI is referred to the Monopolies and Mergers Commission before 3.00 p.m. on Wednesday, February 11, 1998 or the date on which the Offer becomes or is declared unconditional as to acceptances, whichever is the later. In such a case, the Offer will cease to be capable of further acceptance and accepting Essex Radio shareholders and DMGI will thereupon cease to be bound by Forms of Acceptance submitted before the time when the Offer lapses.

Essex Radio is the owner and operator of five local radio services operating in the Essex, Hertfordshire and East Anglian regions. In aggregate, these services have a total potential reach of 3.15 million listeners with a range of principally music-based programmes.

In the year to September 30, 1997, Essex Radio reported consolidated profit before tax of £1.16 million (1996: £931,000) from turnover of £5.41 million (1996: £4.85 million). Shareholders funds at that date were £3.07 million (1996: £2.48 million).

The DMGT group continues to expand the breadth of its media interests and has long considered commercial radio broadcasting to be an important part of this expansion. DMGI believes that the potential for further development of Essex Radio will be greatly enhanced through the resources and support of the DMGT group. The acquisition of Essex Radio is an important step in establishing the DMGT group s own UK commercial radio operations.

An offer document is expected to be posted to the shareholders of Essex Radio today.

Press enquiries to:
Peter Williams 0171 938 6631