The Competition Authority plans to extend its investigation into Denis O'Brien's €200 million takeover of Emap's radio stations here - Today FM, Highland Radio and FM104.
The regulator is expected to announce today that it is moving to a more detailed Phase II investigation of the proposed deal, which was lodged for approval on July 30th. This will surprise observers, who had expected the regulator to issue a definitive judgment today. It is understood that the authority is preparing to force Mr O'Brien's Communicorp group to sell FM104, but has yet to decide a sale mechanism for the Dublin station.
The authority's extended Phase I investigation was due to conclude this week.
It is understood that the authority has indicated to Communicorp that it will allow it to acquire Dublin-based Today FM and Highland Radio in Donegal. As a result, Mr O'Brien will own two national radio stations - Today FM and Newstalk.
But it will force Mr O'Brien to sell FM104, as he already controls 98FM and Dublin youth station Spin 103.8. Under the terms of the sale agreement with Emap, it is believed Mr O'Brien is required to sell on any stations that regulators require him to divest.
It is not clear what mechanism the authority will seek for the sale of FM104 and whether Mr O'Brien will be allowed to take ownership of Today FM and Highland in the meantime.
A sale of FM104 could take several months to complete and would be subject to the approval of the competition body, the Broadcasting Commission of Ireland (BCI), and the Minister for Enterprise, Trade and Employment, Micheál Martin.
The regulator is expected to agree a sale process with Mr O'Brien's Communicorp in the coming weeks.
The BCI last month gave Mr O'Brien's takeover of Today FM and Highland Radio the green light, but said he had to sell FM104. FM104 has the biggest listenership of any Dublin local radio station. It is expected to achieve earnings before interest, tax, depreciation and amortisation of €4.5 million in the year to the end of March 2008.
Emap paid €30 million in equity and debt to buy FM104. Financiers said that the station could fetch more than €46 million in a sale.
