Shares in GCap Media, the owner of Classic FM, Capital Radio and Xfm, have risen almost 50% as it spurned one bid approach, amid talk more are likely.
Capital, Planet Rock and Classic Gold are among GCap's stations
The surge came as GCap rejected an approach from rival Global Radio that potentially valued it at about £313m.
Global, which owns radio stations such as Heart and Galaxy, said that it was assessing its position and it is not clear if it would make a firm offer.
But analysts say more consolidation in the sector and more bids are likely.
GCap, which also owns the Choice FM brand as well as about 90 digital stations, said that Global's proposed offer of 190 pence per share "significantly undervalued the company", despite being at a 57% premium to its Friday closing price.
GCap shares ended the day up 45.5%, or 55p, at 176p.
GCap saw its former chief executive, Ralph Bernard, quit last year after profits fell on the back of sliding advertising revenues.
But observers expect that Global - chaired by former ITV boss Charles Allen and backed by horse racing tycoons JP McManus and John Magnier - will push ahead with its takeover plans.
Global was set up as a vehicle to buy radio stations and snapped up the Chrysalis Group's stations last year for about £170m.
GCap was now "firmly in play" as a takeover target, said Panmure Gordon analyst Alex DeGroote.
"GCap has a very troubled operating history and, even now, consensus forecasts might look optimistic.
"However in our view it is still a major assets play within UK media. On the back of the Global approach, counter offers are likely," he said.
Numis analyst Lorna Tilbian said that Global could afford to pay the high premium to GCap's share price because of the "significant synergies and cost saving opportunities in putting the two companies together".
A formal offer would likely be referred to the Competition Commission as their combined business in cities such as London and Birmingham would hold a large slice of the commercial radio market, she added.