A decision on the merger is expected on Wednesday when Patricia Hewitt, secretary of state for trade and industry, is expected to give the go-ahead, with Carlton Communications and Granada optimistic that approval will not mean having to sell off their television sales houses.
It had been thought the DTI would impose tougher conditions on the merger, with a combined ITV being forced to sell off one of its airtime sales houses to appease advertisers and agencies, which fear ITV controlling more than 50% of the TV ad market.
Shares in Granada jumped 11.58%, or 17.5p, to 185.5p and Granada jumped 7.67%, or 7.5p, to 105.25p.
The two have had to wait almost a year for the go-ahead, which will provide a boost for the commercial television sector in the face of a dominant BBC and Sky.
If reports are true that there are few restrictions on the merger, it will mean bigger cost savings. Investors will be hoping that, with the advertising market set to improve in 2004 and the cost savings, the combined Carlton/Granada will be able to take full advantage.
A spokesman for the Department of Trade and Industry declined to comment on when the decision will be made.
The two ITV companies have also rubbished suggestions in The Sunday Times that said the government anticipated a shake-up of executives at a combined ITV.
"A strong ITV is very important. It is not good that there is no real opposition to the BBC and Sky," the Sunday Times quoted a government source as saying. "We think that there maybe should be a change in direction as far as the management is concerned. Of course, that is a matter for the shareholders."
But Granada dismissed the Sunday Times report and said it had good relations with the government, pointing out that Granada chairman Charles Allen ran last year's Manchester Commonwealth Games and has been appointed deputy chairman of London's 2012 Olympic bid committee.
"The story is pure mischief-making," a Granada spokesman said. "It's inconceivable that anyone senior in the government would comment on management issues on the eve of a Competition Commission report.
"Charles Allen has a good relationship with the government. If this was in any way representative of their view, then he would know."
Carlton and Granada have also come under fire for giving the two top jobs of chairman and chief executive of a combined ITV to Carlton's Michael Green and Allen respectively.
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