Murdoch buys remaining share of dmg

Illyria, Lachlan Murdoch's private company, has announced today that it has purchased the remaining 50% of dmg radio australia from the UK's DMGT.

The purchase price is believed to be $100m plus 50% of the FY12 shareholder dividend.

In a statement this afternoon (sunday) Lachlan Murdoch commented;

"We are pleased to move to 100 per cent ownership of DMG Radio Australia. When we acquired our 50 per cent interest in DMGRA in November 2009 we set out to create one of Australia’s leading media companies."

"Over the past three years, working alongside DMGRA’s wonderful staff, we have successfully implemented our growth strategy."

“In that time Nova has regained its position as the Number 1 national network for people 18-39 and we have successfully launched SmoothFM. The EBITDA (earnings before interest, taxes, depreciation, and amortisation) of DMG has doubled and the IRR [internal rate of return] on our initial investment is more than 60 per cent."

Illyria have had a chequered entry into media in Australia. It made a profitable investment in Prime Media, exiting earlier this year with a profit of $6m, around 25% on the original investment. 

However its 9% shareholding in Network TEN has been troublesome. The network has been subject to a recent capital raising, and is presently trading at the lowest share price in the organisation's history.

The dmg radio investment has proven to be more profitable.

The network's earnings have grown since Illyria became a partner, perhaps in part to the removal of the 'no more than 2 ads in a row' launch strategy. Furthermore, the Nova Network has regained the leading position 18-39, due largely to a softening of the Southern Cross Austereo stations ratings since the departure of Hamish & Andy from Monday to Friday drive.

Since Illyria's purchase in late 2009, Nova Perth have done well, strongly improving their overall position.

However, Nova Sydney, Melbourne, Brisbane and Adelaide have declined in overall share, with dmg's flagship station Nova 969 currently rating 5.8% overall, well down since Illyria's purchase and around 3% behind rival 2Day FM.

The Illyria buyout ends a 15-year involvement in Australian radio from the Daily Mail & General Trust (DMGT), which began when foundation CEO Paul Thompson purchased 5AA Adelaide in the late 90's.

Now that Illyria owns 100% of dmg radio, do you think they will change the name of the company ? Vote now here