Scottish Radio Holdings (SRH), which owns Today FM and Dublin's FM 104, has entered the race to purchase Galway Bay FM, which is valued at €10-€15 million.
Preliminary contacts between SRH and the station have taken place over recent weeks, it is understood. UTV is also believed to be interested and there have been some suggestions in the radio industry about American giant Clear Channel taking an interest and even Denis O'Brien making a bid.
SRH, which also owns Cool FM and Downtown Radio in Belfast, is anxious to increase its radio presence in the Republic. It recently paid €30 million for FM 104. The sale was approved by the Competition Authority, with conditions, several weeks ago.
Mr Paul Connolly, a Dublin-based financier, was appointed in recent weeks by the Galway Bay FM board to handle takeover approaches, although officially the station is not for sale.
Reports about UTV making a bid have been circulating for several months, but it is possible that UTV will have difficulty getting any bid approved by the Broadcasting Commission of Ireland (BCI). Its rules stipulate that no one company can have a controlling interest in 15 per cent of the radio market.
UTV, which already has four licences (Cork's 96 FM, Cork's 103 FM, Q 102 formerly Lite FM and Limerick's Live 95 FM), might exceed this cap if it purchased Galway Bay. UTV has declined to comment on any potential sale of Galway Bay.
If a sale goes through, the main beneficiaries would be local Galway business people and the Connaught Tribune newspaper group.
The owner of Galway Bay FM is Western Community Broadcasting Services Limited. The main shareholder is Oranmore businessman Mr Gerry Rabbitte. Other investors include the Archbishop of Tuam Dr Michael Neary, the Western Health Board, the GAA and the Galway Advertiser.
In the last set of listenership figures for 2003, the station's "listened yesterday" figure declined by 4 per cent, but its market share was up 5 per cent. Its performance came against a 2 per cent drop in radio listenership throughout the Republic.
The station could prove attractive to many buyers because of its location in Galway, one of the State's fastest-growing cities. However, media valuations have fallen in the past two years, although the €30 million paid for FM 104 gave the radio market a boost.
