CLARE FM'S €7.2 million proposed sale to Radio Kerry has been abandoned.

It is understood that executives at the Clare station informed the Broadcasting Commission of Ireland earlier this week that the sale was not going through.

Details of the deal emerged late last year and the sale was to have been completed by the end of March. A source close to the deal, however, said "agreement could not be reached" between the two sides. The source declined to elaborate on the reasons for the breakdown in negotiations.

No comment was available from Clare FM while calls to Radio Kerry's chief executive Paul Byrne were not returned.

Led by managing director Liam O'Shea, Clare FM has a large number of individual shareholders, including Minister of State Tony Killeen. Its directors include Flan Galvin of the Clare Champion newspaper and local grocery retailer Gabriel Mangan.

It is understood that some small investors declined to sell their shares. Clare FM made an after-tax profit of €241,000 on turnover of €1.9 million in 2006.