A senior radio industry source who has examined the ramifications of a deal, told Media Week that a merged business would have to offload either the West Midlands Heart service, Galaxy, 96.4 BRMB in Birmingham, Beacon FM, or the Wolverhampton service of Classic Gold.
Alternatively, the group could dispose of more than one service to resolve the issue - Heart East Midlands plus either Mercia FM, or its Classic Gold service, or the Nottingham/Derbyshire version of Classic Gold. Competition lawyers believe that the merger will go through without too much trouble, despite the merged entity having around 44% of the radio ad market, as long as some stations are offloaded to satisfy the requirements of the Communications Act.
Anthony Woolich, partner and head of the EU/competition team at law firm Lawrence Graham, said: "The merged entity would have the largest share of national ad revenue in the UK of any media. I think the deal would be allowed, but there will probably be some divestments required on both a national and regional level."
However, it is thought the combined group's six-station presence in London, including Heart 106.2 and 95.8 Capital FM, will not present regulatory problems because there is a sufficient choice of stations in the capital that are owned by Global's competitors.
Last Wednesday, Global Radio's courting of GCap Media moved closer to consummation, when the deadline set by the Takeover Panel of 5pm on the 5 March, was extended by three weeks.
The move gave a clear indication that GCap is taking Global's 225p a share offer seriously, after rejecting two previous bids.
GCap chief executive Fru Hazlitt recently outlined her profit-boosting strategy, which some industry observers expect Global to adopt.
But Jonathan Barrowman, head of radio at Initiative Media, questioned whether sticking to Hazlitt's plan makes sense.
"The strategy was the right thing to do for the City, though not necessarily the industry," he said. "If profitability is a priority, then does that put innovation into second place? I don't think Global would follow the GCap strategy, as it is not a plc."
And few people think there is a role in the merged company for Hazlitt, who was only appointed as GCap's chief executive in December.
Paul Bates, analyst at Charles Stanley, said:"It has quite a few chiefs already - Richard Park, Charles Allen, Ashley Tabor. I think if she does [clinch the deal] she'll leave covered in glory."
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