GCap, the troubled media group which earlier this month sold two of its radio stations to Guardian Media Group for £60m, rejected a significantly higher offer from Chrysalis because it did not want the stations to fall into the hands of its arch-rival.
It is believed that Chrysalis, which was not invited to bid for the two Century stations covering Manchester and the North-East, made an eleventh-hour indicative offer of over £70m.
A banker close to GCap said: "It is true that Chrysalis made a higher offer than GMG, but it was a last-minute approach and one made without the benefit of detailed information about the two stations."
Chrysalis had hoped to re-brand the two stations as Heart and secure cost synergies by integrating the businesses with its operations in the Midlands.
Despite the risk of handing Chrysalis a competitive advantage, shareholders in GCap will be concerned that the company spurned the chance to secure a much higher sum for its two Century stations.
Chrysalis's Heart FM station in London is outperforming GCap's flagship station, Capital FM, according to figures last week from Rajar, the body that monitors radio listeners.
Heart's audience share remained unchanged at 6.1 per cent for the second quarter of this year, while Capital's sank from 5 per cent to 4.7 per cent. Both stations have been hit by the continuing rise of BBC Radio 1.
On the day the Rajar figures were released, GCap's shares slid 5.6 per cent to 218p while Chrysalis's stock enjoyed a 2.6 per cent rise.
Earlier this year, GCap gambled on reducing the number of adverts on Capital FM in the hope that this would entice listeners back to the station.
It has been reported that the group is attempting to lure Karren Brady, the managing director of Birmingham City football club, to take over the reins at Capital FM.Reuse content