Virgin Radio owner SMG has stayed tight-lipped over claims it will reject a proposed merger with rival talkSport firm Ulster TV.
It was suggested yesterday the £400 million merger proposed by UTV was seen by SMG as an attempt to buy the company at a discount while SMG looks for a successor to chief executive Andrew Flanagan.
However, SMG has a higher market capitalisation than UTV, so SMG shareholders would lose out.
It is thought shareholders -who include DJ Chris Evans - are instead interested in a full cash takeover.
Media mogul Mr Evans holds nearly 10 million SMG shares, just over three per cent, after he sold Virgin Radio and TV production firm Ginger Productions to SMG three years ago for £225 million. His holding is worth £7.6 million.
Any deal would require the backing of ITV as it has a 17 per cent stake in SMG, which also owns Grampian and Scottish TV and the Pearl & Dean advertising business.
Since SMG and UTV last week said they were in talks speculation has mounted a private equity firm may be preparing a bid.
SMG shares have lifted ten per cent to value the company at £241.5 million but ended yesterday down 0.25p at 76.25p. UTV has a market value of £175 million.
SMG's radio and television assets are likely to represent a good fit for UTV, which bought talkSport owner The Wireless Group last year.
UTV and SMG would have about five per cent of ITV's audience.
Investec Securities analyst Steve Liechti said there was "concern" over the "lack of takeover premium" for SMG shareholders.
He said: "The suggested 50:50 UTV:SMG nil premium merger appears unrealistic given relative market caps.
These suggest a split of 55:45 in favour of SMG, although we believe negotiations are very preliminary."
Mr Liechti said there were four options for shareholders, including no change or a bid by ITV, which may still have hopes of bringing the network under control.
However, Mr Liechti said this was unlikely as ITV had problems of its own and was currently searching for a new chief executive following the departure of Charles Allen.
He said a merger with UTV was "attractive" because of cost savings, while a bid of around £28 million or 91p-a-share from a private equity firm could be on the way.
On Friday, UTV said discussions with SMG were "at an early stage" and there was no certainty they would lead to a bid.
The Northern Ireland firm added that the merger "could proceed by way of a bid by either company for the other".
SMG on Friday confirmed that it had received a merger proposal from UTV. Under the terms of the proposal, "SMG shareholders would receive a 50 per cent. interest in the merged entity", the company said.