ITV shares jump as bidding talks continue

Shares in broadcaster ITV jumped today after the boss of Big Brother producer Endemol refused to rule out a possible takeover bid for the company.

John de Mol, head of the Dutch company which also makes 'Deal or No Deal', told the Financial Times that a tie-up with the UK firm “could make sense”.

ITV shares, which hit a record low last week due to fears that the firm is facing a slump in advertising revenue, rose almost 14% today.

It was reported yesterday that ITV was in talks with a number of potential investors looking to buy BSkyB’s controversial 17.9% stake in the broadcaster.

As well as Endemol, Five owner RTL, Italian media firm Mediaset and several US broadcasters have been in contact with ITV executive chairman Michael Grade, the Observer reported.

BSkyB this week expects to hear the outcome of its appeal against a Competition Commission ruling that it must reduce the stake below 7.5%.

Business Secretary John Hutton ordered Sky to sell down the shareholding in January to address competition concerns.

If it loses the appeal, BSkyB may however decide to sell the shares on the open market, or place them with institutional investors rather than selling to one buyer, the newspaper added.

As well as incurring the displeasure of competition authorities, BSkyB’s £940m (€1.1bn) move in November 2006 also sparked anger from Virgin boss Sir Richard Branson.

Its 17.9% stake in ITV is now worth just £273m (€342m) at the current market price.

Last year ITV’s annual profits fell 35% to £188m (€235m) for 2007, hit by lower revenues at flagship channel ITV1 and increased investment in digital channels.

And in recent weeks the company has seen a host of City analysts mark down their estimates for ITV as potential advertisers cut back on spending in the run-up to Christmas amid mounting economic gloom. The broadcaster also faces tough comparisons with last year when it was boosted by coverage of the Rugby World Cup.