Sharewatch: SMG Soars Following ITV Purchase Speculation

Speculation surrounded SMG yesterday, as murmurs amongst city traders suggested that ITV has approached the company and is considering a purchase of its television assets.

The rumours served to drive SMG’s share price up significantly, rising by 5.05% to close at 104p. The speculation was sparked by a comment made last week by the UK’s largest commercial broadcaster, which stated that its stake in SMG was ‘a core holding’. The statement led some to suggest that a deal was close.

Meanwhile, ITV rose by 3.64% to 106žp, buoyed by both the rumours surrounding SMG and the continued optimism carried over from last week’s interim results. The broadcaster announced that pre-tax profits have jumped up 59% to £132 million in the first half of this year, driven by an improvement in advertising revenue which grew by 4% for the group (see Improved Advertising Revenue Drives ITV Profits Up 59%).

Elsewhere, global advertising group WPP saw a dip of 1.17% to close at 508p as it announced the £845 million acquisition of US agency, Grey Global. The deal brings WPP neck and neck with US-owned Omnicom for the title of the world’s largest advertising agency (see WPP Wins Battle For Grey With £845 Million Bid).

The FTSE 100 rose by 0.3% yesterday, climbing to 4,558.5, while the FTSE 250 managed a 0.4% increase, closing up at 6,272.8 with a trading volume of 2.4 billion shares.

The closing prices of media company shares on Monday were: