KUALA LUMPUR, Sept 9 — Astro Malaysia Holdings Bhd has proposed to acquire a 100 per cent equity stake in Capital FM Sdn Bhd for RM42 million.

In a filing to Bursa Malaysia, Astro said wholly owned subsidiary Measat Broadcast Network Systems Sdn Bhd has entered into a conditional sale and purchase agreement with Star Media Group Bhd and Star RFM Sdn Bhd to acquire 4,999,999 ordinary shares and one ordinary share in Capital FM Sdn Bhd.

Capital FM holds a Content Applications Service Provider Individual (CASP) licence that enables it to broadcast both Capital FM and Red FM radio stations.

"Post completion of the acquisition, Measat intends to rebrand and broadcast these two radio stations via on-air and online platforms,” Astro said.

Considering the scarcity of radio spectrums and frequencies in Malaysia, Astro believes that acquiring Capital FM along with its CASP licence and radio frequencies is an effective way to expand its current reach and content formats to target new audiences, as well as increase advertising revenues.

Measat intends to utilise internal funds for the acquisition as well as the funding requirement of Capital FM.

"The acquisition is not expected to have any material effect on the earnings, net assets and gearing of the company for the financial year ending 31 January 2017,” Astro said.

Astro closed three sen lower today at RM2.90. — Bernama