Financiers John Magnier, JP McManus, Dermot Desmond and Denis Brosnan have agreed to buy Chrysalis Radio for £170 million (€252.3 million) in a deal that gives them command of the third-largest commercial radio business in Britain.

The transaction is subject to the approval of shareholders in Chrysalis, the listed group whose business will be confined after the disposal to music publishing, wholesale distribution and a small "incubator" record label.

The Irish investors plan to use the Chrysalis radio business, whose brands include Heart and Galaxy, as a platform for further expansion in the British commercial radio business. Among the wealthiest Irish businesspeople, they have previous associations through British nursing home chain Barchester.

Their entry into the British commercial radio sector comes amid a consolidation of that business in light of a decline in advertising revenue. Online advertising now generates more revenue in Britain than radio.

Former ITV chief Charles Allen is chairman of the acquiring vehicle, Global Radio UK, which the Irish investors control through a Jersey-based investment company called Global Radio Group.

The investors became involved in the Chrysalis deal through Lydian Capital, a Geneva-based investment group founded by Mr Brosnan. A former chairman of Kerry Group and founder of that business, Mr Brosnan is chairman of Barchester.

The radio acquisition marks a departure into the media sector for Lydian, whose stated concentration in the past was healthcare, leisure, and nutrition and consumer product investments.

Global Radio's directors are Ashley Tabor, chief executive of music publisher Global Talent Group, and Owen McGartoll, an executive director of companies in the Barchester group.

The deal values the Chrysalis assets at 16.7 times Chrysalis Radio's earnings before interest, tax and amortisation in the year to August 2006. The consideration will be in cash. It is at the lower end of expectations, as Chrysalis had hoped to fetch as much as £200 million for the business. The sale follows a review initiated last February.

Its radio assets include eight FM licences, one AM licence and 31 DAB digital radio licences. Its portfolio of stations reach six million listeners in London, Manchester, the midlands, Yorkshire and northeast England.

Heart is described as the number-one independent local radio brand and Galaxy claims the most young-adult listeners in the commercial sector.

In the year to February, Chrysalis's radio revenues declined 9 per cent to £30.1 million. Its earnings before interest, tax and amortisation fell to £3.4 million from £5.1 million a year earlier.

It expected a "flat revenue out-turn" in radio for the year as a whole, but reported a rapid increase in revenues at its fledgling digital radio operation.

Excluding any intercompany balances, Chrysalis had net assets of £47.4 million last February.