The Ritz Music Group, the label which records Daniel O'Donnell, is to acquire a rival firm, the Grapevine Label, which has recorded Christy Moore, Sharon Shannon and Sinead Lohan for the British and European markets. The main shareholder and chairman of Ritz, a London-based, quoted company, is the Co Cavan-born businessman Mr Mick Clerkin. Up to now the firm, which has an associated company in Dublin wholly owned by Mr Clerkin, has specialised in easy listening artists including Charlie Landsborough and Foster and Allen.

Mr Clerkin, who commutes between Dublin and London, said yesterday that the deal would cost between £2 million and £3 million. It could increase Ritz's repertoire, giving it a strategic entry into the developing market of mainstream, contemporary singers and allow a foothold in the music distribution area through Grapevine Distribution.

"It would put us into the sales and marketing field which is something I wanted to do for some time. It would make sense to get involved in an existing operation," Mr Clerkin said. Mr Clerkin (57) has 76 per cent of Ritz, worth £14 million on paper since the 55p share price increased to 90p in the first ten months of the company's flotation on the Ofex market.

He is closely associated with Daniel O'Donnell through their directorship and joint ownership of Brockwell, which has registered offices at Lombard Street, Dublin, and which has the singer's recording and touring rights. Last year Ritz paid Brockwell £743,000 in royalties and tour-related costs. Grapevine, owned by Londonbased Wexford man, Mr Paddy Prendergast and his English partner, Mr Steve Fernie, has also recorded US singers Joan Baez and Emmylou Harris.

Under the terms of the deal, Mr Prendergast will become chief executive with Mr Clerkin remaining as chairman and his daughter Ms Ann Clerkin continuing as managing director.

Mr Peter Jay, a spokesman for Ritz, said the turnover forecast for this year was estimated at between £5 million and £6 million.