ITV gains on bid speculation

ITV shares made further heavy gains yesterday after reports said former BBC director-general Greg Dyke may launch a £6bn takeover bid. Shares in the company have risen by 10% since Wednesday - including 3% yesterday - amid speculation a bid could be on the cards.

Weekend press reports said Dyke, Lord Hollick - recently appointed adviser of US-based Kohlberg Kravis Roberts (KKR) - and former managing director of the Daily Telegraph Stephen Grabiner, now at Apax Partners, could join forces in a consortium.

A MediaGuardian report poured cold water on rumours of Dyke's involvement. Sources told the web site that Dyke had not been in touch with Hollick recently and the first he knew of his association with KKR was when he read about it in the papers.

Hollick, who used to own the Anglia and Meridian ITV franchises before selling them to Granada, was quoted last week as saying that buying the group back "would have a nice ring to it" and that he would not rule anything out.

Jeremy Batstone, an analyst at stockbroker Charles Stanley, said he thought a bid for ITV was a "distinct possibility" although there may be a question mark over the price.

He said: "There is little doubt that ITV's future as an independent company has been viewed with raised eyebrows."

On Sunday, The Observer said KKR and Apax had held evaluation talks, with more planning in coming weeks.

It cited friends of Dyke as saying the former London Weekend Television chief "can't wait to get back to broadcasting" and being part of an Apax bid could give him the opportunity he has been awaiting. ITV shares rose 3.5p to 118.5p before closing half a penny higher at 115.5p.

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