The UK's biggest commercial radio group GCap Media has scrapped plans to sell nine local stations after it deemed the offers too low.

The company, formed in 2005 by the merger of GWR and Capital Radio [WAMN: 10-May-05], says bids came in at about half the expected price of between £50 million ($87m; €72m) and £60m.

It concludes: "The board does not believe that it would be in the best interests of shareholders to sell these businesses at the level of the offers received."

GCap decided to sell the stations in November following a strategic review of the group's assets and activities. It has faced difficult ad sales conditions and management departures since its inception.

The radio giant also warns that fiscal fourth-quarter revenues will be 17% down year-on-year, and full-year sales (until 31 March) are likely to be down 13%.

The decline is partially a result of GCap's decision to halve the number of commercial slots on its London flagship station Capital Radio in a bid to cut clutter and win back listeners.

It has defended this high-risk strategy, claiming "advertisers have reacted positively to the relaunch of Capital".

GCap adds: "We continue to improve programming and, as previously stated, we expect audience growth at Capital Radio to start to come through in the final quarter of 2006 and revenues growth to come through thereafter."

Data sourced from Media Week (UK); additional content by WARC staff