Carlton climbs on rumours of digital exit

LONDON - Shares in media group Carlton soared today as market speculation indicated that it was looking for a way out of ITV Digital, its digital terrestrial joint venture with ITV partner Granada.

In mid-afternoon trading, Carlton had risen 6.6% to 181.25p, having been up as high as 10% this morning. Granada was also up by 1.5% to 126.25p, having climbed 4.2% earlier in the day.



BSkyB, which is set to pick up the bulk of ITV Digital's customers should the terrestrial service collapse, climbed 2.5% to 745.5p



A spokesman for Carlton Communications refused to be drawn on whether Carlton was planning an exit from ITV Digital, saying that Carlton "would not comment on market speculation".



ITV Digital has been eating away at Carlton and Granada's profits, sparking calls that their broadcasting licence fees should be cut and that the two companies should merge to form a stronger larger company in an attempt to ward off the effects of the advertising downturn.



Reports have indicated that ITV Digital is looking for a third shareholder to help ease the burden on Carlton and Granada. NTL, the BBC and more recently BT have been linked with the service.



Shareholders have urged the companies to abort the joint venture, which is struggling to compete against satellite rival BSkyB and digital cable companies NTL and Telewest.




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