It has reduced its debt pile to about 10bn crowns through asset sales in Germany and Ireland this year.. Scottish Radio Holdings yesterday insisted it has a strong future as an independent company as it pulled out of takeover talks with potential bidders. The Glasgow-based company blamed the breakdown of the talks on "uncertainties" in the stock market, which had persuaded all parties involved not to continue the discussions. The share prices of media companies are in decline amid fears of a sharp slowdown in the advertising market. Scottish Radio Holdings yesterday insisted it has a strong future as an independent company as it pulled out of takeover talks with potential bidders.

The Glasgow-based company blamed the breakdown of the talks on "uncertainties" in the stock market, which had persuaded all parties involved not to continue the discussions. The share prices of media companies are in decline amid fears of a sharp slowdown in the advertising market. "It is disappointing in some ways," SRH's chief executive, Richard Findlay, said of the breakdown in talks. "It's really in large part due to current uncertainties in the market place and that certainly does destabilise discussions."Potential bidders are thought to have included Capital Radio, Britain's biggest radio broadcaster, and GWR, the broadcasting group in which Daily Mail &General Trust has a 29.9 per cent interest. Clear Channel International, part of the US radio, entertainment and outdoor advertising group, is also considering entering the fray, possibly in partnership with Guardian Media Group. Analysts, however, believe SRH could still find itself vulnerable to a hostile takeover bid.Scottish Media Group has built up a 29.45 per cent stake in its rival and, according to SRH, turned down invitations to explain its intentions. SMG, which is chaired by former telecoms regulator Don Cruickshank, declined to comment yesterday.

SMG bought into SRH at prices up to 1,595p a share, spending around £150m. Shares in SRH, owner of Radio Forth and Radio Clyde, fell 13 per cent to 1,075p as the market digested news that all talks were off.Other broadcasting stocks were pummelled amid reports that Capital Radio, which has already warned on profits falling 10 per cent in the year to September if advertising conditions did not improve, would issue lower guidance for the fiscal year when it reports interim earnings today. The company refused to comment ahead of the announcement.Capital, the country's biggest radio operator, fell 5.2 per cent to 690p, while GWR Group plunged 10 per cent to 430p. Smaller radio groups also declined with Chrysalis, owner of the Heart and Galaxy stations, down 7 per cent to 226.5p and SMG, which owns Virgin Radio, down 5.5 per cent to 203.5p.In recent months, analysts have ratcheted down advertising revenue forecasts for radio, television and print media. Last week, ABN Amro cut its forecast for Capital's full year pre-tax profit to around £30m compared with its initial estimate of £41m.It is thought that SMG built up its stake in SRH ahead of the publication of a White Paper on cross media ownership expected within weeks if Labour is re-elected to government.Although the White Paper probably wouldn't result in parliamentary legislation until the second half of 2002, it would allow media groups to begin building cross holdings and other ownership structures in anticipation of new rules.