THE Takeover Panel is closely monitoring speculation surrounding Scottish Radio Holdings (SRH) after the owner of Radio Clyde and Forth firmly rejected an approach from the 28% shareholder Emap.

Clydebank-based SRH’s robust response to Emap’s 1040p per share indicative offer was immediately followed by a report that Emap had already lined up Johnston Press as a buyer for SRH’s substantial local newspaper holdings.

Tim Bowdler, Johnston Press’s chief executive, was forced to dismiss the report as “speculative” but confirmed that he was interested if the newspapers became available. “There’s no secret in that — Emap knows of our interest,” he said. Lord Gordon of Strathblane, the chairman of SRH, and a non-executive director at Johnston Press, was not available for comment.

One insider close to the talks said he was surprised that the Takeover Panel had not intervened, considering the press speculation and the fact that it was in a technical offer period. SRH shares closed up almost 150p on the week at 1002p.

A spokesman for SRH said that the Emap bid significantly undervalued the company’s businesses, which split 2:1 radio to newspapers. He added that there was a lot of interest in the newspaper division but pointed out: “It’s not Emap’s to sell.”

Institutional shareholders appear to agree with the SRH management that the Emap price undervalues the Scots group and the offer would have to be raised. Lesley Duncan, the UK equity fund manager for Standard Life Investments which owns 2.4% of SRH, said the group was well managed and focused on the business. Another substantial shareholder, the Dundee publisher DC Thomson, is also believed to be backing the management.

One institution pointed out that if the stalemate continued, Emap could sell the stake back to SRH for a profit. The timing of Emap’s announcement was described as “bizarre”, and the threat to withdraw the offer “absurd”.