Shares digital

With Global Radio chomping at the bit to takeover struggling GCap Media (GCAP), new chief executive Fru Hazlitt has unveiled recovery plans for the company, which she hopes will convince investors its shares could be worth more than the 190p offer it rejected last month.

Hazlitt is targeting an underlying profit margin of 12%-14% in the current year ending March 2009, rising to 17%-19% the following year. Considering its current margin is around 7% there is plenty of work to be done.

The improvements are expected to come through a series of cost-saving measures and disposals of non-core brands such as theJazz and Planet Rock.

'GCap media will become a leaner and more dynamic company focused on maximising the revenue and profit potential of five key brands on FM and broadband, the platforms that we believe consumers want and which offer the greatest growth opportunities,' Hazlitt says.

The shares are currently languishing around 185.5p but speculation is mounting that Global will come back with an improved offer. The takeover panel has issued a put-up-or-shut-up date of 5 March for Global to make its next move.

Shares says: Existing investors should hold tight and hope for an improved bid but, given the current climate, don't expect too much of a premium.

by: Susanna Twidale