Chrysalis Group Jun 2007

Our client Chrysalis Group PLC ("Chrysalis") announced the conditional sale of its radio operations ("Chrysalis Radio") to Global Radio, a newly-formed investment vehicle, for an aggregate cash consideration of £170mlion. The consideration represents a multiple of 16.7x Chrysalis Radio's reported EBITA for the financial year ended 31 August 2006.

The disposal is subject only to shareholder approval, and a circular convening an EGM to approve the Disposal will be sent to shareholders as soon as practicable. The Board of directors of Chrysalis, which together accounts for approximately 30% of the shares, has given irrevocable undertakings to vote in favour of the sale. Canaccord Genuity will act as sponsor for the Class 1 disposal circular.

The sale represents the successful outcome of the strategic review announced by Chrysalis in respect of its radio operations in February 2007. Chrysalis expects to receive estimated net proceeds from the sale of approximately £163mlion (after estimated completion adjustments and transaction-related costs) and to report a profit on disposal of approximately £95mlion.

After reducing the indebtedness of the continuing Chrysalis Group and after making a payment into Chrysalis's pension plan, the remaining net disposal proceeds will be returned to shareholders. The exact amount is dependent, inter alia, on discussions with the pension trustees but Chrysalis expects to return between £90mlion and £100mlion to shareholders, representing approximately 54 pence to 60 pence per share (before taxation), in the final quarter of this calendar year.

Canaccord Genuity was sole financial advisor to Chrysalis Radio.