British media group SMG has confirmed it has received a merger proposal from Northern Ireland broadcaster UTV.
"Under the terms of this proposal, SMG shareholders would receive a 50 per cent interest in the merged entity," SMG said.
SMG, which owns Virgin Radio, has a market capitalisation of about £224 million, while UTV has a market value of about £177 million.
In a statement, UTV said that it had made an approach to SMG but said that discussions were at an early stage.
The approach from UTV, which owns the Northern Ireland ITV television franchise and Talksport radio, comes a month after SMG chief executive Andrew Flanagan stepped down after criticism from investors who were unhappy with the company's performance.
The stock has fallen more than 26 per cent since June.
SMG's shares rose 1.4 per cent to 71 pence early today. UTV's London-listed shares rose 1.6 per cent to 325 pence.