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Guardian Media Group has sold its radio business, which includes the Real Radio and Smooth Radio networks, to Global Radio for an estimated price of £70m.
GMG, which has built up the UK's third-largest radio group over the past 13 years, signed the deal with Global Radio after receiving a number of offers for the GMG Radio unit.
It is thought that the offer tabled by Global – the parent company of brands including Capital, Heart and Classic FM – was in the region of £50m and was by some distance the most attractive offer.
However it is understood that the price was pushed up to about £70m in a last-minute bidding war after Bauer Radio, the second-largest UK radio company owner of brands including Kiss and Magic, made an 11th hour play to snatch GMG Radio.
Industry insiders believe Bauer Radio will now be forced to look at further acquisitions in the radio market in order to remain competitive with Global Radio.
Bauer Media had not responded to a request for comment at the time of publication.
"The purpose of GMG's portfolio is to support and develop our journalism," GMG chief executive Andrew Miller said in an email to staff on Monday.
"This means that we are sometimes faced with the difficult choice between retaining a business that has performed well, as with this case, or deciding that a disposal at an attractive value represents the best way of discharging our responsibilities."
As part of the sell-off, Stuart Taylor, who has led GMG Radio since 2009, will leave the company.
Global Radio, which already sells national advertising for GMG Radio, said the business will continue to be run separately while a regulatory review into the deal takes place.
Mark Lee, Global Radio's managing director for the regions, is to take over the responsibilities of GMG Radio chief executive following the departure of Taylor.
"We are pleased to have concluded this deal, and once the required approvals have been received, we will look forward to welcoming the GMG radio stations into the Global family," said Ashley Tabor, founder and executive president of Global Group. "We believe that this is a very strong business with brands and assets that are highly complementary to those of Global Radio."
Miller confirmed that GMG Radio had received offers from several interested parties.
GMG, which also publishes the Guardian and MediaGuardian, valued the radio assets as worth £118.9m in the group's most recent published financial report to 31 March 2011.
However, the assets are expected to see a write-down in the order of more than £40m when the latest results are revealed for the year to 31 March 2012.
Revenues at GMG Radio fell 6% year-on-year to £47.1m in the 12 months to the end of March 2011.
GMG Radio reported a £4.1m pre-tax loss with earnings before interest, tax, depreciation and amortisation of just over £2m.
The performance of the company is thought to have improved over the past year. Revenues are thought to be up slightly in the year to the end of March 2012, with EBITDA growing to more than £3m.
Global Radio may have to deal with competition issues in areas including Cardiff and parts of the midlands as a result of the deal.
Rivals including Talksport-owner UTV Media, which is understood to have submitted a bid, Absolute Radio and Bauer Radio, which owns Kiss and Magic, are expected to look at lodging complaints with the Competition Commission that Global Radio will have too much market dominance in certain regions.
When Global Radio took control of GCap in 2008 it was forced to sell off some stations in the midlands to Orion Media, headed by former Chrysalis Radio boss Phil Riley, to appease regulators.
However, another observer points out that it appears that competition regulators are starting to take a more benign view of local media ownership rules.
The government and regulators came in for heavy criticism after blocking the sale of seven local newspapers by DMGT's Northcliffe Media to the KM Group last year, a move which subsequently resulted in two of the titles being closed.
Earlier in June, Northcliffe managed to gain approval to buy the weekly Nottingham freesheet The Topper, after extremely protracted negotiations, despite already owning the Nottingham Post, which meant it had a high combined share of the local market.
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