GMG is understood to be looking at acquiring the business from BC Partners, the venture capitalist that bought the business from John Madejski, who jointly owned Auto Trader's regional titles with GMG, in 1998.
GMG and BC Partners merged their two halves of the business in 2000 to form Trader Media, which is worth £1.2bn. However, under a clause in the contract, BC Partners has the right to leave the business after four years.
GMG chairman Paul Myners said the company was "limbering up" for a possible bid for the 52% share in the business, or that it would sell its 48% to BC Partners.
Under the terms of the deal, after four years BC Partners can find a buyer for the entire business, which would then offer to buy it and GMG out. However, GMG has a pre-emptive right to offer to buy out BC Partners.
GMG, which last week successfully bid a reported £44.5m for Jazz FM, is understood to be easily able to afford £500m for Auto Trader.
Auto Trader is published in 13 regional editions and sells about 350,000 copies a week. Its parent Trader Media publishes 20 other titles and is reported to have profits of more than £70m a year.
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