Friday, 31 August 2007

More on Virgin flotation

The planned flotation of Virgin Radio was thrown into doubt today after its chief executive unexpectedly quit to join GCap Media. Paul Jackson will join GCap as managing director and will manage its struggling London radio station, Capital Radio. His worked at Capital previously, and this defection comes just months after Virgin Radio announced plans to float the £105 million station.

Mr Jackson’s move looks certain to delay the float process and could boost the chances of a trade buyer stepping in for the business. The group has already had interest from potential buyers. Mr Jackson’s move will reunite him with Fru Hazlitt, his former Virgin colleague and GCap Media’s managing director. Mr Jackson joined Virgin from Capital in 2001 and has been head of Virgin Radio for the last 8 months.

In June SMG delivered its second profits warning in a year with SMG’s shares down 14%. Rob Woodward, a former commercial director at Channel 4, took over as chief executive at the group in March and announced radical plans aimed at changing its fortunes. Rajar figures showed that Capital’s share of the market is now 4.1% down from 4.6% in the first quarter. Capital's Johnny Vaughan also lost the top slot in the lucrative commercial breakfast show battle to Heart's Jamie Theakston and Harriet Scott. SMG said in a statement that Mr Woodward and Richard Huntingford, chairman of Virgin Radio, would continue to lead the float process.

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