Classic FM parent group GCap Media today confirmed it had rejected an approach from rival Global Radio potentially valuing the firm at around £313 million sterling (€420 million).
The firm said Heart and Galaxy owner Global Radio had made an indicative proposal at 190p a share - a 57 per cent premium to GCap's closing share price on Friday.
GCap said the proposed offer "significantly undervalued" the company.
Reports over the weekend suggested that Global had proposed an offer at 180p a share but that GCap was keen to give newly appointed chief executive Fru Hazlitt a chance to increase the value of the firm.
GCap shares jumped 32 per cent to 168.5p following the bid interest.
Global Radio, which is chaired by former ITV boss Charles Allen, yesterday said it was considering its position, although it is thought the firm may press ahead with the takeover plan.
GCap's move to reject the proposal without informing shareholders is likely to raise eyebrows, given that an offer at 190p a share would value the firm at around £110 million more than its current stock market valuation.
GCap has seen its share price more than halve since last summer after it revealed that annual profits had plummeted by 35 per cent.