Choice owns and operates the two Choice FM radio licences in London. The transaction values the entire business at £16million on a debt free/cash free basis.

Choice FM broadcasts to a potential audience of 5.8million adults in London. 96.9FM has been broadcasting to South London since 1990 and 107.1FM began broadcasting to North London in 2000. The format of Choice embraces all types of urban contemporary black music. Choice also owns a network of four digital licences for London, the North West, the North East and the Severn Estuary as well as a 7% share in the MXR digital radio consortium.

In the last available RAJAR, for the quarter to June 2001, the combined Choice audience was 277,000 with a total London market share of 0.8% (the equivalents for Capital’s London stations at the same date were an audience of 3.6million and total London market share of 16.2%). Unaudited figures for the twelve months to September 2001 show Choice had revenue of £1.4million, made a loss on its analogue operations before financing costs of £0.1million and invested £0.1million in its digital activities.

Capital’s shareholding in Choice is a strategic investment made in anticipation of changes in the regulations governing media ownership in the UK. Capital believes Choice has significant opportunities under its existing formats to grow its audience and share across London both within the black community, which has more than doubled in size over the past ten years, and amongst other listeners who appreciate the music it plays.

David Mansfield, Chief Executive of Capital Radio, commented:

Choice is an excellent investment for Capital. It brings to us a stake in a brand that has exciting growth potential and operates in an important music genre. We anticipate increasing our shareholding and becoming more involved in the business when the Radio Authority proposals for relaxing ownership gain government approval.

Patrick Berry, Chief Executive of Choice, commented:

We are delighted that Capital has taken this step. It is a substantial vote of confidence in our ability to develop our brand and grow our audience. My management team and I look forward to Capital’s commitment, encouragement and support over the coming years.