Classic FM firm spurns new offer

Capital, Planet Rock and Classic Gold are among GCap's stations

GCap Media, the owner of Classic FM, Capital Radio and Xfm, has turned down an improved takeover approach from rival Global Radio.

GCap said Global had raised its offer to 202p per share from an original offer of 190p a share, which valued GCap at about £313m.

However, GCap said the bid "significantly undervalues" the firm and opted to reject the proposal.

Global owns radio stations such as Heart and Galaxy

GCap saw its former chief executive, Ralph Bernard, quit last year after profits fell on the back of sliding advertising revenues.

Its new chief executive, Fru Hazlitt, set out a strategy earlier this month that is expected to deliver a £12.3m improvement in full-year profit.

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.