Fresh offer for Classic FM firm

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

Global Radio has increased its proposed takeover offer for GCap Media, the owner of Classic FM and Xfm.

Global, which owns the Heart and Galaxy radio stations, said it was increasing its takeover proposal to 225p a share, valuing GCap at £371m.

On Friday, GCap snubbed an offer of 202p per share, saying the proposal significantly undervalued the company.

GCap said it would consider the new offer from Global and would make a further announcement in due course.

Shares in GCap closed 6% higher at 199.25p.

Knockout blow?

Global said its new proposal was subject to GCap extending the deadline for a formal bid to 2 April.

In January, the UK Takeover Panel imposed a deadline of 1700 GMT on 5 March for Global to announce a firm intention to make a bid for GCap - a so-called "put up or shut up" deadline.

The move came after GCap had rejected an initial bid proposal of 190p a share from Global.

Global Radio is chaired by former ITV boss Charles Allen and backed by horse racing tycoons JP McManus and John Magnier.

It was set up as a vehicle to buy radio stations and bought Chrysalis Group's stations last year for about £170m.

Global urged GCap shareholders to accept its latest offer, saying that the price represented an 86% premium to GCap's share price before the first bid approach was made.

It also said the new proposal offered substantially greater value than could be achieved by GCap alone, even if the revamp that GCap is planning is carried out.

In February, GCap chief executive Fru Hazlitt unveiled plans to cut costs and boost advertising revenues.