Capital Radio broadcaster GCap Media was today granted another three weeks to agree a takeover deal with suitor Global Radio.
The Takeover Panel extended its "put up or shut up" deadline to March 26 at GCap’s request to allow more talks with Global, which owns Heart and Galaxy.
Global tabled its latest 225p a share proposal - valuing the company at £371 million - yesterday. The approach is 18% higher than the 190p it first put forward in December.
GCap, which also owns Classic FM and Xfm, is the UK’s largest commercial radio broadcaster. It said: "We will work together with Global to determine whether it will be able to make a recommended offer."
Global - backed by Irish racing tycoons John Magnier and JP McManus - is looking to become a powerful force in UK commercial radio after snapping up Chrysalis Group’s radio stations for £170 million last year.
The company was created as an investment vehicle to buy the radio stations and is looking to use Chrysalis as a platform for further expansion in the sector.
Global yesterday called on GCap’s shareholders to urge the board to accept the offer, despite chief executive Fru Hazlitt’s plans to cut costs and turn around the business.
It said its final proposal offered "substantially greater" value than could be achieved by GCap on a standalone basis, even if the cost savings and initiatives were achieved in full.
The group added: "In Global Radio’s view, GCap faces considerable challenges given the current conditions in the radio, advertising and stock markets."
"The final proposal offers cash and certain value today compared with the inherent execution risk in GCap’s strategy."
GCap, which has around 30% of the total commercial radio industry, was formed from the merger of Capital Radio and GWR in 2005.
Ms Hazlitt, the former Virgin Radio boss, has vowed to boost advertising at Capital by ditching its previous policy of broadcasting no more than two adverts in a row, as well as achieve cost savings of £8.8 million a year through disposals and restructuring.
Global chief executive Ashley Tabor later said he was "delighted" that GCap’s board had made it possible to work towards finalising an offer.
He added: "Global Radio strongly believes that a combination of its brands with those of GCap will create a strong and vibrant company that will be able to breathe new life into Britain’s commercial radio sector."