Virgin Radio IPO put in doubt as boss defects

LONDON - A planned initial public offering of Virgin Radio is in doubt in the wake of the shock defection of its chief executive Paul Jackson to Capital Radio, with City analysts now favouring a trade or private equity buy-out in the spring as the most likely future for the station.

The sale of outdoor division Primesight has taken the sting out of SMG’s £170m debt and the City is expecting the Emap sell-off to take precedence over Virgin Radio’s sale.

Ex-Chrysalis chief executive Phil Riley has also been tipped as the most likely replacement for Jackson, where he would rejoin former colleague Richard Huntingford, who joined Virgin Radio as chairman last month.

Meanwhile, the management team at outdoor advertising contractor Primesight has spoken about its future plans, following its leveraged buyout of the company from SMG, with private equity backers GMT Communications.

Chief executive Naren Patel and sales and marketing director Nigel Clarkson, who were “heavily involved” in the buyout, said they were preparing to develop their advertising portfolio after an injection of cash from their new owners.

Patel said this week that SMG was “very focused on television”, adding that while they had been “great owners”, it was time to move on. It is thought SMG has limited its investment in Primesight over the past two years, causing frustration for the management team, which has been keen to develop the company.

The £62m buyout is the third for Patel, who was managing director at Primesight when it was floated in 1995 for £13.5m and was later involved in the company’s £35m sale to SMG in 1997.

“The sale has been going on for nearly a year. It’s been a really challenging time for us, so it is great that it’s reached a conclusion,” he said.

Patel added that the company was now in the process of completing some “significant contracts” that would increase the number of panels in its portfolio, and that GMT’s business plan would also focus on investing in digital outdoor.

“They’ve bought into our plan and the experience of our team, and now want us to go out and deliver,” said Patel.

Primesight’s development director Terry Dyer and operations director Paul Daniels completed the line-up of managers involved in the buyout.

Media Week 04-Sep-07, 11:20