Global Radio's deadline for making a formal offer for GCap has been extended by one more day at the eleventh hour, with sources confident a deal is still expected.

It is understood that "certain finalities" were not completed by the 5pm deadline today. The Takeover Panel has therefore agreed to give Global 24 hours more following approaches made by its advisers and GCap's advisers.

Global Radio sources have played down the impact of an Ofcom investigation into a competition run across GCap’s stations, insisting it is unlikely to be the factor that will scupper a deal.

There have been concerns in the past 24 hours over whether an Ofcom probe into a phone-in competition across GCap's stations could scupper the deal. However, one leading shareholder told Times Online that it believed the deal was on track.

GCap said in a trading update this morning, before today's deadline for Global to table an offer for the Capital 95.8 owner, that underlying revenue in the quarter to the end of March was likely to be up 4 per cent, while its statutory revenue for the year was likely to be flat. GCap added that it remains in talks with privately owned Global Radio on a possible offer.

GCap also said in the statement that it was contacted by Ofcom, the communications regulator, on Friday regarding its inquiry into alleged breaches of broadcasting rules in connection with a competition that GCap ran early last year. It said that it was cooperating fully with Ofcom.

The management of Global Radio was last night deciding whether to table a firm offer for GCap Media by today's 5pm deadline, as concerns arose over the Ofcom investigation into a phone-in competition called Secret Sound that ran on a number of GCap's stations.

Sources insisted last night that the investigation, which came to Global Radio's attention only this weekend, was unlikely to scupper the £371 million deal. However, there are still a number of uncertainties that Global needs to address and sources refused to confirm whether Global would be asking for extra time.

The highest fine Ofcom has imposed on a company is £2 million. The maximum fine Ofcom would be able to impose on GCap is 5 per cent of qualifying revenues but there are concerns over the fact that, in the worst case scenario, Ofcom also has the ability to reduce the length of licences. However, sources said that this would be an unlikely outcome.

Ofcom said in a statement yesterday: "It is a matter of public record that the investigation is into a competition that ran in early 2007 called Secret Sound, on a number of its networks. The case was referred to Ofcom by PhonepayPlus in late summer 2007. The investigation is on-going; like all our investigations Ofcom will go through the proper due process to determine the outcome."

Global and GCap have have been in talks regarding a possible recommended offer for much of the past month after Global raised its offer for GCap to 225p per share on March 4. A deadline for making a firm offer was originally set for last week, but it was extended by five days following a request from Global.

GCap has previously rejected two Global offers at 190p and 202p

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