DENIS O'BRIEN has sold Highland Radio in Co Donegal to Galway-based businessman Gerry Rabbitte for about €10 million.
Mr Rabbitte, a former shareholder in Galway Bay FM, is believed to have outbid Letterkenny-based listed agribusiness group Donegal Creameries.
It is understood that a purchase agreement was signed yesterday between Mr Rabbitte and Communicorp, Mr O'Brien's radio investment group. Staff at Highland were informed of the transaction yesterday afternoon and the station carried details of the sale on its news reports.
The Broadcasting Commission of Ireland (BCI) is also thought to have been informed about the deal.
It is understood that Charlie Collins, Highland's managing director and a former part-owner of the radio station, will remain with the company, but it is not clear if he will have an equity stake in the business.
Mr Collins is believed to have considered launching a management buyout, backed by former Ulster Unionist politician John Taylor, whose Alpha media group has a wide range of newspaper and broadcast assets.
The management team, however, is believed to have baulked at the price tag placed on the station.
Mr O'Brien gained control of Highland earlier this year as part of a €200 million takeover of British media group Emap's three Irish stations.
He recently disposed of Dublin station FM 104 to UTV for €52 million to comply with a ruling from the Competition Authority. The sale of Highland means that he has paid about €138 million for national broadcaster Today FM.
Mr Rabbitte, who is based in Oranmore, was the largest shareholder in Galway Bay FM until its sale to the Connacht Tribune newspaper in 2006. He is believed to have made €6.1 million from that deal.
Highland recorded pretax profits of €584,951 on turnover of just under €2.8 million in the year to the end of March 2007. This represented a profit margin of 21.2 per cent. Its accumulated profits at the end of March 2007 stood at €1.98 million.
Highland has the biggest market share of any local radio station here. Latest JNLR radio listenership figures showed it had a market share of 62.5 per cent between January and December 2007, down 0.9 per cent on the previous period.
It employs 21 full-time staff and its latest 10-year contract with the BCI expires in 2014.
