"The latest Rajars [Chrysalis' best figures to date] confirm that we start this process from a position of considerable strength. We have no pre-conceived view on the outcome of the review, other than a commitment to ensure Chrysalis Radio's participation in the long-term development of the UK radio sector."
Chrysalis shares were up 3.34% in early trading to 162.5p, a 12-month high. They had already risen last week after the Financial Times reported that Chrysalis was considering selling its radio assets in favour of focusing on its Chrysalis music business.
The potential sale of strong analogue local radio brands Heart, Galaxy and LBC comes amid a tough time for the commercial radio sector. Although Chrysalis said in a recent trading update it is outperforming in the ad revenue market, it expects year-on-year growth to be flat.
The merger two years ago of GWR and Capital to form GCap has resulted in a troubled market leader, often suggested to be vulnerable to a private equity bidder because of its low share price.
Second-placed Emap has troubles of its own, with its radio revenues experiencing double-digit declines in December and January, and job cuts already enacted at its Big City stations likely to be repeated in its much larger consumer magazines division.
Emap and Chrysalis were last week revealed to have held discussions about sharing programming and commercial deals between their dance music networks, South of England-based Kiss and North of England-based Galaxy.
Third-placed Guardian Media Group Radio rebuffed an approach from Chrysalis in early 2005 and last year went on an acquisition spree that took its station portfolio from six to 11.
Last week its Rock Talk bid was awarded the licence for a new FM station in Manchester by Ofcom, which overlooked two bids from Chrysalis.
Beneath Chrysalis are Virgin Radio owner Scottish Media Group and TalkSport owner UTV, which are locked in ongoing discussions about a merger but are struggling to agree on who gets how much of the new company.
In addition, non-domestic radio groups may make bids for Chrysalis. US radio giant Emmis was linked with the company in July 2005.
Emmis made a number of bids for the FM licences issued by Ofcom over the past two years, but was unsuccessful.
Canadian broadcaster CanWest won two licences in Bristol and the Solent area during 2006.
Australian bank and investment fund Macquarie won a licence in Plymouth but appears to have pulled the plug on the operation before getting a station up and running.
One area where Chrysalis is comparatively weak is in digital radio. Although it has a stake in several regional digital multiplexes it has no coverage on the UK's only national digital multiplex while Emap moved first to secure distribution via the Freeview digital TV platform.
It is also unclear how strong Chrysalis' position is in the running to secure distribution on the second national digital multiplex, which has just been advertised by Ofcom.
It is not known whether it is submitting a bid to run the multiplex or is restricting itself to being a content partner for one of the groups, such as Channel 4 Radio, which is bidding to run the multiplex.
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