Harbottle & Lewis act for Chrysalis Group in acquiring 106 Century FM

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Harbottle & Lewis act for Chrysalis Group in acquiring 106 Century FM

Leading media and entertainment law firm, Harbottle & Lewis LLP, has acted on behalf of Chrysalis Group plc ("Chrysalis") in the acquisition by Chrysalis Radio Holdings of 106 Century FM, the regional commercial radio station for the East Midlands, from GCap Media plc ("GCap") for a cash consideration of £29.5 million. The office of Fair Trading had required the sale of 106 Century FM as a condition for clearing the merger of Capital Radio and GWR.

The acquisition of 106 Century FM follows Chrysalis Radio"s strategy of investing in radio licences covering large metropolitan and regional markets with good opportunities for audience and revenue growth. The transaction was funded partly through a new Royal Bank of Scotland £20m bank facility and partly from Chrysalis"s internal cash resources.

Richard Huntingford, Chrysalis chief executive, commented "106 Century FM is a great strategic fit for Chrysalis. The combination of 100.7 Heart FM in the West Midlands and 106 Century FM in the East Midlands will strengthen our branded radio network in this important region. It also extends our national presence, which is increasingly attractive to advertisers."

Lead Harbottle & Lewis partner, Mark Bertram, commented, "It was great to work again with long-term client Chrysalis Radio, this time to secure in a short time 106 Century FM in the East Midlands." Harbottles have in the last few years previously advised Chrysalis on the acquisition of LBC 97.3 and LBC News 1152 from GWR and others, the sale of Galaxy 101 to Vibe Radio and the establishment of Digital News Network.

Others involved at Harbottle & Lewis were Madi Oakes (corporate) and Adam Mitton (intellectual property) including support from the tax, employment and property groups. Douglas Lochhead, Lucianna Cha and Alison Wilds also advised Chrysalis on the terms of the new RBS facility.

For further information, please contact Paul Gower on 0207 667 5000 or e-mail paul.gower@harbottle.com

Note for Editors

Harbottle & Lewis LLP provides specialist advice to the media and entertainment industries and is consistently recognised as a leading firm in these areas by independent sources. It continues to provide a complete range of commercial legal advice to its clients on corporate, technology, litigation, insolvency, intellectual property, regulatory, defamation, property, employment and immigration, finance and tax issues.

The firm"s work encompasses all areas of the communications, media and entertainment industries including film, television, broadcasting, sport, music, publishing, fashion, advertising and theatre. The continuing development of new technologies in both media and entertainment has led to the creation and growth of complementary practices in areas such as new media, interactive entertainment and mobile telephony which have become highly successful.

The firm has built upon its extensive knowledge and experience across the broadcasting industries to develop a pre-eminent specialist radio practice offering advice on all aspects of the radio industry. These include advising on the establishment and consolidation of radio stations, funding and structuring issues, negotiation and drafting of services contracts, regulatory concerns, licence applications, employment and other disputes as well as addressing a broad range of general broadcasting queries. Through this the firm consolidates its in-depth understanding of the industry as a whole and current issues motivating commercial ventures in the sector.

Further information about the firm (and both the corporate and broadcasting practice groups) can be found at www.harbottle.com

Information on 106 Century FM

106 Century FM was launched in September 1997 by Border Television. The station subsequently became part of the Capital Radio Group when it acquired Border Television in May 2000. On 8 March 2005, the OFT announced that it had accepted undertakings by Capital Radio to divest 106 Century FM in lieu of a reference to the Competition Commission in respect of the merger of Capital Radio and GWR plc to form GCap.

106 Century FM is a commercial radio station (operating on both FM and DAB digital radio), broadcasting to the East Midlands, with a coverage area of almost 2 million adults. 106 Century FM offers a "full service" mix of adult contemporary music, talk and news targeting 25-44 year old listeners. The music format and target audience of 106 Century FM is similar to that of Chrysalis"s Heart brand.

In the RAJAR Q1 figures released on 5 May 2005, 106 Century FM"s audience increased to 334,000 listeners, listening on average for 10.6 hours per week, producing total hours listened of 3.5 million.

Information on Chrysalis Radio

Chrysalis Radio commenced business in 1994 with a strategy to invest in licences covering large metropolitan or regional areas where it identified opportunities for audience and sales growth, and to develop a network of brands to maximise those opportunities. Since the launch of its first station, 100.7 Heart FM in the West Midlands in September 1994, Chrysalis Radio has grown by both licence award success and acquisition to become the third largest commercial radio business in the UK, with 8 major market stations that cover over 47 per cent. of the adult population.

Chrysalis Radio today comprises two adult contemporary radio stations broadcasting under the Heart brand (100.7 Heart FM in the West Midlands and Heart 106.2 in London) together with four dance music stations, operating under the Galaxy brand (in Birmingham, Manchester, Yorkshire and the North East) and two further stations in the London market operating as LBC 97.3 and LBC News 1152. It also operates a range of digital radio assets, which include significant stakes in a number of multiplexes and digital services. These include extensions of ‘Heart" and ‘Galaxy", an ‘Arrow" rock service, along with a 29 per cent. stake in a rolling regional news service, ‘DNN", which it manages on behalf of the other shareholders. All of Chrysalis"s analogue brands are also now available nationwide on the Sky digital platform.

In the most recent RAJAR figures released on 5 May 2005, Chrysalis Radio posted a UK wide (analogue plus digital) weekly reach figure across its stations of 5.9 million listeners and total listening of 48.1 million hours, delivering a 10.3 per cent. share of total UK commercial radio listening.

Issued by: Paul Gower, Marketing Co-ordinator

E-mail: paul.gower@harbottle.com

Ends/16 May 2005