For a moment it looked like the Litt Corporation was going to face delays to proceed with its Club Asia acquisition after the Office Of Fair Trading (OFT) intervened late last year.
Since BizAsia.co.uk exclusively confirmed that Sunrise Radio’s parent company, Litt Corporation had bagged the licence of Club Asia, it left many questioning how the corporation can hold a monopoly of the analogue Asian radio market in London.
The Litt Corporation was boosted with the addition of the youth targeted station, Club Asia, which was rebranded to Buzz Asia in October. It already has Sunrise Radio and Kismat Radio broadcasting on analogue in London.
After Ofcom and Club Asia’s administrators, Mazars, gave the Litt Corporation the nod to launch Buzz Asia, rival stations and some of the listening audience including advertising clients showed disamay of Sunrise Radio’s power in the London market. This resulted in an investigation by OFT whereby the body invited individuals to comment on Litt Corporation’s acquisition of Club Asia.
OFT gave a deadline of early-January for all comments to be received. OFT has now announced its decision in the favour of the Litt Corporation. It ruled that the Litt Corporation has been cleared and is free to “complete the acquisition by Buzz Asia Limited, a subsidiary of Litt Corporation Limited, of the broadcast licence previously allocated to Club Asia London Limited.”
It further added that the responses it had received did not qualify for OFT to proceed with its investigation under the mergers provisions of the Enterprise Act 2002 (the Act). This is on the basis that this broadcast licence does not, on its own, nor when considered together with the other assets passing in this particular case, constitute an enterprise.
The OFT also said it had received a comment by a “third party” who argued that, in substance, the transfer of the broadcasting licence enabled Buzz Asia to derive turnover from the transferred licence through the generation of advertising revenues. OFT said, “However, whilst the licence may be necessary to generate such revenue, in isolation it is far from sufficient. The right to broadcast radio content to young Londoners of South Asian heritage on the frequency previously used by Club Asia does not in itself generate turnover. An acquirer will require, amongst other things, premises, equipment and personnel to run the service and generate advertising business. For this reason, the OFT considers that the transfer of the licence exclusively in itself cannot be regarded as an enterprise.”
It has now come to know that seven days after Buzz Asia acquired the broadcasting licence, its affiliate, Sunrise Radio Limited, also acquired from the administrators some office furniture and equipment – a full schedule of which was provided to the OFT.
However, no other goodwill in the form of customer records, client lists, advertising contracts or trading name (which was retained, for re-use, by Club Asia) was transferred with the licence.
So in days to come, expect the Litt Corporation to go ahead full throttle with its rebrand of Club Asia to Buzz Asia and continue to conquer the Asian radio market in London.