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Lifestyle sees red over radio sale

REDFM’ s acquisition of Karratha-based North West Radio has been thrown into turmoil following Perth-based Lifestyle Radio’s decision to take legal action against Foundation Capital, North West Radio and its shareholders.

Lifestyle Radio has issued a writ amid allegations it was gazumped by RedFM, following what it understood to be an agreement in principle for the purchase of North West FM.

“We had agreed to acquire North West Radio and NWFM and had agreed on terms and, unbeknown to us, they’d done a deal with RedFM,” Lifestyle Radio managing director Tom Tapping said.

“We’re open to resolution, but the bottom line is there’s no question in our mind that we have a binding agreement.”

As a major shareholder in RedFM, Foundation Capital is part of the legal action. It’s understood Foundation Capital facilitated the sale.

“We’ve tried to resolve this without legal action. It’s regrettable and unfortunate and it’s not our preferred course of action,” Mr Tapping said.

Lifestyle Radio owns and operates a station in Margaret River and is working towards building a statewide network, including North West Radio.

The matter has been taken to the Supreme Court “because of the amount of damages involved and the lost opportunity to make the group 50 per cent more valuable,” according to Lifestyle Radio chairman Alistair MacKinlay.

Lifestyle, however, is still keen to acquire the station, despite the deal struck between North West Radio and RedFM.

“Our door is always open,” Mr MacKinlay said in regard to acquiring North West Radio in the future.

RedFM announced the $4.5 million deal with North West would double the station’s potential audience.

North West Radio managing director Nick Ringrose said the legal action would be defended.

Mr Ringrose said there were a number of offers , including one from Lifstyle, for the business but RedFM’s offer was the best value for shareholders.

“Given Lifestyle’s proposed offer document was never executed by the NWR share, it’s clear the shareholders were free to accept the superior offer,” he claimed in a statement issued to Business News.

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