GCap rejects improved $660 million Global Radio bid

By Gavin Haycock

LONDON (Reuters) - GCap Media GCAP.L, Britain's biggest commercial radio group, rejected an improved 333 million pound ($660 million) bid proposal from suitor Global Radio and won the backing of a major shareholder.

Global faces a March 5 deadline by Britain's Takeover Panel to formally declare its intentions, having pitched conditional offers to GCap first at 190 pence and now 202 pence per share.

GCap said on Friday Global had came back to it the previous day with its revised offer, which again was subject to conditions relating to due diligence and financing facilities.

GCap, headed by new Chief Executive Fru Hazlitt who recently unveiled her growth strategy for the business, noted that Global's new approach did not take account of the savings that could be generated from combining the businesses.

It added that the financing of the approach had question marks over whether it could be completed successfully.

GCap's three leading shareholders are key to the takeover battle given Daily Mail & General Trust (DMGOa.L: Quote, Profile, Research, Stock Buzz), Fidelity and Schroders own nearly half of the company's shares. They hold 14.3 percent, 15 percent and 16.1 percent respectively.

When Standard Life's 7.6 percent and Millgate Capital's 6.2 percent are added in, Global is left trying to win over five shareholders who own nearly two-thirds of the company.

"We are a long-term shareholder and happy to wait for plans for current management to come through," said Schroders fund manager Vincent Vinatier, referring to the recent strategy plan outlined by Hazlitt.