UPDATE 1-Global Radio confirms GCap bid interest

(Adds analyst comment, more detail)

LONDON, Jan 6 (Reuters) - Privately owned Global Radio said on Sunday it recently made a bid approach to GCap Media GCAP.L that was rejected by Britain's largest commercial radio group.

The approach will put the spotlight on GCap's shares in early trading on Monday given a report in the Sunday Telegraph newspaper that said Global was thought to be willing to pay a premium of more than 50 percent to GCap's market value.

"This approach was conditional, inter alia, on limited due diligence and the recommendation of the GCap board for any offer," Global Radio said in a statement.

"The approach was rejected by the GCap board," it added.

The Times newspaper said on Saturday that Global Radio's approach was made last month soon after the company failed to win an auction for the radio assets of media group Emap EMA.L.

Shares in GCap closed at 121 pence in London on Friday, valuing the business at just under 200 million pounds.

Global Radio said on Sunday it was considering its position and there was no certainty that an offer would be made.

The group is headed by Charles Allen, former chairman at broadcaster ITV (ITV.L), and was set up specifically to invest in UK radio.

The Sunday Telegraph said Allen was understood to have made the approach to GCap in writing on Dec. 17, which was rejected two days later by the company's Chairman Richard Eyre.

If correct, the rejection would have occurred one day before GCap announced it had appointed Fru Hazlitt, who previously worked with Virgin Radio and Yahoo (YHOO.O), to become its new chief executive.

GCap is Britain's biggest commercial radio broadcaster and home to stations such as Classic FM, Xfm and London's Capital 95.8. Global Radio owns Heart 106.2 and Galaxy.

Numis Securities said in response to Global's interest in GCap that there would be lots of synergies in combining the two businesses although any bid would likely face a referral to competition authorities given the overlap of its stations in London and Birmingham, central England.

The broker said it would expect GCap to say the approach undervalues the business and that it wants Hazlitt to have the chance to set out her vision for the group.

A spokesman for GCap on Sunday declined to comment on the Global Radio bid interest.

GCap has not issued any statement about the bid approach, although a statement following Global's confirmed interest could come ahead of the London market open on Monday.

Numis Securities on Friday it had picked GCap as its media bear stock for 2008 among smaller media stocks in Britain given its high rating -- an annualised forecast 2008 price-to-earnings ratio of 30 times -- and the challenges posed by operating with a single advertising revenue stream and high fixed cost base. (Reporting by Gavin Haycock, editing by Martin Golan)