Rolling Stones guitarist Ronnie Wood and his manager, the entertainment lawyer Nick Cowan, have received a takeover approach for their American internet dance music company from cash-shell Chandra.

Aim-listed Chandra has approached Seattle-based Groovetech to accept an all-share, reverse takeover to form the first part of a wider stock market listed music, entertainment and media group. A spokesman for Chandra refused to comment, however.

Mr Cowan holds the majority of shares in Groovetech, which he set up in 1995 while working on the west coast of the United States and now plans to expand into Britain. Mr Wood owns a stake of around 4%. The duo are also original shareholders in Sports Internet Group, owner of the Planetfootball websites.

Groovetech webcasts live sets from cult DJs such as Paul Oakenfold and aims to become a global on-line community for underground music. It owns two web-driven radio stations in Seattle and San Francisco.

British director Tintin Chambers was a major figure in the Acid House rave culture of the 1980s. Chandra is chaired by Nigel Drummond, brother of Virtual Internet chief executive Jason Drummond. Earlier this month it confirmed it was in advanced talks on its first acquisition after a rise in its share price. Last night's closing price of 251.5p values the company at £13m.