Radio stations including Birmingham-based Heart FM and Galaxy were sold for #170 million today in a deal involving former ITV chief executive Charles Allen.
Chrysalis, which owns the stations along with London’s LBC, has conditionally agreed to sell its radio arm to investment vehicle Global Radio, which is chaired by Mr Allen and includes backing from Irish tycoons JP McManus and John Magnier.
The disposal leaves Chrysalis with its music publishing business, home to artists including Gnarls Barkley, the Dixie Chicks and Mariah Carey.
Chrysalis chief executive Richard Huntingford plans to concentrate on growing the publishing operation following the sale of the radio stations.
Chrysalis Radio is the UK’s third largest commercial broadcaster.
Global Radio wants to use the Chrysalis radio stations as a platform to grow a larger commercial radio business.
In addition to its Birmingham operations, Chrysalis stations also cover London, Manchester, Yorkshire and the North East, with an estimated six million listeners every week.
The radio business made underlying earnings of #10.2 million in the year to August 2006, on revenues of #65.6 million.
The proposed sale follows a review of the business launched by the group’s board in February after calls from some shareholders to create more value by splitting the group up.
Chrysalis plans to return around #100 million to shareholders following the sale, and also expects to save around #3.5 million in reduced overheads over the next 18 months.
The back catalogue of the company’s music publishing business now contains around 65,000 copyrights, with artists ranging from Billy Idol and David Bowie to Madonna and Damon Albarn.
The company is looking for growth of between 5% and 10% a year from the publishing business.
Chrysalis chairman Chris Wright said: "Chrysalis Music is well placed to build upon and exploit its position as a leading international, independent music business."